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Fox News Executives Under Investigation for Potential Breaches of Fiduciary Duty

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Schubert Jonckheer & Kolbe LLP is investigating potential derivative claims on behalf of the shareholders of Twenty-First Century Fox, Inc. (NASDAQ: FOX), related to allegations that Bill O’Reilly and Roger Ailes sexually harassed and assaulted women for decades. The investigation concerns whether the company’s officers and directors breached their fiduciary duties by failing to stop or prevent Mr. O’Reilly’s and Mr. Ailes’s inappropriate behavior, willfully ignoring the company’s alleged culture of misogyny, and misleading investors about payments related to sexual harassment settlements. 

On October 21, 2017, the New York Times reported that Bill O’Reilly entered into his sixth sexual harassment settlement, settling claims with long-time Fox News analyst, Lis Wiehl in January of this year. Publicly known harassment settlements involving Mr. O’Reilly total approximately $45 million. Despite this troubled record of sexual harassment claims, 21st Century Fox granted Mr. O’Reilly a four-year, $25 million a year contract, just one month following his $32 million settlement with Ms. Wiehl. Mr. O’Reilly was dismissed from Fox News in April amid public outrage in response to sexual harassment claims, daily protests, and loss of advertising partners. He left the network with a $25 million exit package.

Roger Ailes also has a long and troubling history of sexual misconduct at Fox News. On July 6, 2016, former Fox News anchor Gretchen Carlson filed a sexual harassment lawsuit against Mr. Ailes alleging that Mr. Ailes terminated her as retaliation for refusing his sexual advances. Then, on July 19, reports surfaced that Ailes made “unwanted sexual advances” toward Fox News anchor Megyn Kelly at the start of her career. Andrea Tantaros, host of The Five, filed a lawsuit in August against Fox News, Ailes, and several other high-level executives (including Bill Shine) alleging numerous instances of sexual harassment, inappropriate comments, and a newsroom that resembled “a sex-fueled, Playboy Mansion-like cult.” In total, more than twenty women have come forward claiming similar mistreatment and alleging that the women of Fox News routinely had to engage in sexual relations with their managers — in many cases, Roger Ailes — in exchange for promotions. 

In the wake of the scandal, Mr. Ailes resigned on July 21, 2016, receiving a $40 million exit package. In September of last year, Fox settled Gretchen Carlson’s lawsuit for $20 million. Mr. Ailes did not contribute to the settlement, although he was the sole defendant named in the lawsuit. Mr. Ailes’s behavior has already exposed the company to significant civil liability and may also result in criminal liability. The United States attorney’s office has launched an investigation into the way Fox News handled payments related to sexual harassment cases to determine whether the company misled investors.

Schubert Jonckheer & Kolbe LLP is investigating whether Fox’s officers and directors breached their fiduciary duties to the company by willfully ignoring the company’s culture of misogyny and misleading investors. The company’s officers and directors may be responsible for causing significant financial and reputational harm.

If you currently own stock in Twenty-First Century Fox, Inc. and wish to obtain additional information—or would like to participate in a potential shareholder derivative action—please complete the form below for a free legal consultation.