Oregon Attorney General Rosenblum Sues Fox Corporation Board for Breach of Fiduciary Duty

September 12, 2023
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Attorney General Ellen Rosenblum today filed a stockholder derivative lawsuit against the board of directors of Fox Corporation, the corporate parent of Fox News, for breach of fiduciary duty. The Oregon Public Employee Retirement Fund (OPERF) is a Fox investor. The Attorney General represents OPERF and Oregon Treasurer Tobias Read, whose office partnered in the investigation.

“The board of Fox Corporation took a massive risk in pursuing profits by perpetuating and peddling known falsehoods,” said AG Rosenblum. “The directors’ choices exposed themselves and the company to liability and exposed their shareholders to significant risks. That is the crux of our lawsuit, and we look forward to making our case in court.”

A joint Oregon Department of Justice / Oregon Treasurer’s Office investigation launched earlier this year found that Fox’s management on behalf of the company harmed investors, which include Oregon’s public employees. As of August 31, 2023, Oregon held 150,146 shares of Fox Class A stock and 76,169 shares of Fox Class B stock worth approximately $5.2 million.

The complaint filed this afternoon in Delaware Chancery Court, alleges that Fox’s Board knew that Fox News’s promotion of political narratives without regard for whether the underlying factual assertions were true created significant exposure to defamation charges.

Furthermore, by pushing narratives that appealed to their audience regardless of the facts, Fox’s Board should have been especially sensitive to risks of defamation. Yet, Fox’s business model is to promote false claims, including that murdered Democratic National Committee staffer Seth Rich provided hacked emails to WikiLeaks, and continuing through false claims that election technology companies U.S. Dominion, Inc. and Smartmatic USA Corp. rigged the 2020 presidential election.

The lawsuit, to which the New York City Pension Funds is co-plaintiff, also alleges that Fox made no good-faith efforts to monitor for or mitigate defamation risk, unlike effectively every other major media organization in the country.

“Our responsibility to safeguard the retirement investments of Oregon’s public servants is of the utmost importance,” said Treasurer Tobias Read, who is a member of the Oregon Investment Council, which sets state investment policy. “We aim to hold Fox’s board of directors, including Rupert and Lachlan Murdoch, accountable for their decisions. We believe that this action is necessary in fulfilling our obligation to our beneficiaries.”