US investor initiates class action lawsuit against News Corp
July 27 2011, 1:12 pm
Rupert Murdoch
New York – A US shareholder who purchased $38,000 in News Corp shares earlier this year filed a class action lawsuit against the global media group on Friday, claiming that News Corp, the Murdochs, and Rebekah Brooks intentionally covered up and concealed the phone hacking offenses.
The investor, Lewis Wilder, has initiated the first federal-level lawsuit against the News Corp US division in regard to their British newspaper’s damage on the company’s share price because of the illegal activities that have been revealed in recent weeks.
Mr Wilder, who bought 1,000 News Corp shares in late April and 1,000 more in early June through an associated trust, has accused Rupert and James Murdoch of having “affirmatively sanctioned or, at the very least, turned a blind eye to the rampant illegality taking place at News Corp’s newspapers.” Mr Wilder sold his 2,000 shares on July 12, causing him to lose $5,271.
The case, filed in New York, alleges that News Corp and its executives participated in fraudulent, deceptive and misleading behavior and breached the US Securities Exchange Act by issuing “materially false and misleading” statements to investors from March 3 to July 11. This lawsuit has the potential to cover thousands of shareholders who traded millions of shares in that period.
James Murdoch
Mr Wilder asserts that News Corp and its senior executives “either had actual knowledge of the misrepresentations and omissions of material facts [about the hacking] … or acted with reckless disregard for the truth in that they failed to ascertain and disclose the truth about News Corp’s illegal activities, even though the truth was available to them”.
The New York Southern District Court must certify the US case before it can proceed as a class action.
