Oregon’s attorney general is investigating the parent company of Fox News with the intent of suing over possible losses to state employee retirement funds because the channel broadcast false claims about the 2020 election.
The investigation, which Attorney General Ellen Rosenblum announced Monday, is tied to an April settlement of nearly $800 million in a defamation case brought by Dominion Voting Systems. A second lawsuit brought by another voting machine company, Smartmatic, is ongoing.
The settlement amount represents nearly a quarter of the company’s reported 2022 earnings. Fox stocks dipped after the settlement and again a few days later after the company cut ties with host Tucker Carlson, a chief proponent of the false claim the 2020 presidential election was stolen.
About $11.7 million of Oregon’s $92 billion in state retirement funds were invested with Fox Corporation as of December 2022, according to the the state Treasury. Oregon’s retirement fund is a large, globally diversified portfolio with some money invested with nearly every publicly traded company, spokeswoman Amy Bates said in an email.
Bates said the Treasury hasn’t yet determined what, if any, impact the Dominion lawsuit has had on state funds.
Rosenblum said in a statement that she and Read plan to hold Fox’s board of directors accountable for allowing Fox News hosts to spread false information about the 2020 election.
“Treasurer (Tobias) Read and I believe that Fox’s board of directors breached its fiduciary duties by allowing Fox News to broadcast false claims that Dominion and Smartmatic rigged the 2020 presidential election,” she said. “We hope to hold the board accountable and protect the long-term value of Oregon’s investment in Fox Corp.”
Read added that investigating the company’s books and records is a “necessary and significant step” to fulfill the state’s obligation to its beneficiaries.
“We invest for Oregon’s public servants, and we aim to hold Fox’s board of directors, including Rupert and Lachlan Murdoch, accountable for their decisions,” he said.
Rosenblum plans to investigate so the state can file a stockholder derivative suit, or a lawsuit against a company’s corporate leaders brought by shareholders on behalf of the company. In this instance, Rosenblum believes Fox’s senior officers failed to competently manage the company and should have anticipated the Dominion and Smartmatic lawsuits.
In 2021, Rosenblum and Read reached a settlement with L Brands, then the owner of Victoria’s Secret, in a similar stockholder lawsuit over the company failing to investigate its CEO’s ties to Jeffrey Epstein and ignoring a culture of sexual harassment. As part of that settlement, the company committed $90 million to protect employees from harassment and pledged to release former employees from nondisclosure agreements.
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