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News Corp. Shareholders Amend Lawsuit over Hacking Scandal

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Legal woes for News Corp. continue to mount, with a group of the company’s investors amending a shareholder lawsuit to include the News of the World hacking scandal. The lawsuit, which was filed in March in Delaware Chancery Court, seeks to force the media conglomerate’s Board of Directors to pay damages to News Corp for having breached their fiduciary duties.

The News Corp. shareholder class action lawsuit was brought by an investor group that includes a trustee for several investment funds, and union and pension funds led by the New Orleans Employees’ Retirement System and the Central Laborers Pension Fund, according to a Reuters report. It charges that the News of the World hacking scandal is evidence of a “culture run amuck within News Corp and a Board that provides no effective review or oversight.” It further alleges that ‘it is inconceivable that (Rupert) Murdoch and his fellow Board members would not have been aware of the illicit news gathering practices at the newspaper.”

The investors originally filed the lawsuit because of News Corp.’s acquisition of a production company belonging to Rupert Murdoch’s daughter. According to a Forbes report, the group charged the acquisition was only intended to put money in the pocket of a Murdoch’s daughter and place her on News Corp.’s board.

Meanwhile, some of the News Corp. directors in the lawsuit’s cross-hairs are voicing their support for Rupert Murdoch, the 80-year-old found of the company, as well as its Chairman and CEO. According to the Los Angeles Times, a group of independent directors has issued a statement that says: “We are united in support of the senior management team to address these issues.”

The Board said it and News Corp. were “shocked and outraged by the allegations concerning the News of the World” and that the two were “singularly aligned and committed to doing the right thing.”

News Corp.’s stock has taken a hit since the scandal broke, falling around 10 percent since the end of June. It also had to abandon plans to take complete control of British Sky Broadcasting, and shut-down the 168 year-old-News of the World tabloid.

The company is also facing criminal probes in the U.K. and the U.S. In this country, the FBI has opened probes into possible hacking of phones belonging to victims of the 9/11 terrorist attacks, is also trying to determine if alleged bribes paid to British police officials could constitute a violation of the U.S. Foreign Corrupt Practices Act. So far, 10 former News of the World employees have been arrested in the U.K because of the hacking scandal.

breakinglawsuitnews.com disclaimer: This article: News Corp. Shareholders Amend Lawsuit over Hacking Scandal was posted on Thursday, July 21st, 2011 at 2:18 pm at breakinglawsuitnews.com and is filed under Fraud Lawsuits.

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