New York City’s pension funds have sued Fox Corp., alleging the company neglected its duty to shareholders by airing false statements about the 2020 election that exposed it to defamation lawsuits.
“Fox’s board of directors has blatantly disregarded the need for journalistic standards and failed to put safeguards in place despite having a business model that invites defamation litigation,” New York City Comptroller Brad Lander said in a statement to The Hill. Lander oversees the pension funds.
“A lack of journalistic standards and a proper strategy to mitigate defamation has clearly harmed Fox’s reputation and threatens their bottom line and long-term profitability,” he continued.
The Hill has reached out to Fox for comment.
The five pension funds represent more than 800,000 current and retired workers and are long-term investors in Fox shares. They held about $28 million in shares as of July 31.
The suit argues that Fox knowingly amplified false claims from former President Trump and others that the 2020 election was stolen, opening itself up to legal jeopardy, according to the The New York Times, which reviewed the suit.
It alleges the company’s board “consciously disregarded” the risk of broadcasting the false claims, per the Times.
“Defendants chose to invite robust defamation claims, with potentially huge financial liability and potentially larger business repercussions, rather than disappoint viewers of Fox News,” the suit reads, according to the outlet.
Lander said the funds seek ethics and governance reforms in the company.
“Clear governance systems are absolutely necessary for the long-term health of a company. As Fox’s board continues to ignore these red flags, we are holding them accountable as long-term shareholders,” he said in a statement.
The pension funds filed the lawsuit against Fox in the Delaware Court of Chancery, the same court where the company settled a defamation suit with Dominion Voting Systems in April for $787.5 million.
The Dominion suit was settled a day before it was set to go to trial this spring. A second defamation suit from voting machine manufacturer Smartmatic, demanding $2.7 billion in damages, is scheduled to go to trial in 2025.
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