Now Murdoch Faces U.s. Bombardment
As if Rupert Murdoch did not already have enough turmoil to deal with as his British news unit faces increased scrutiny from police and politicians following the recent phone-hacking scandal, now a significant revolt is developing among some of his chief U.S. shareholders. On Tuesday the shareholders, who include Amalgamated Bank, New Orleans Employees' Retirement System and the Central Laborers Pension Fund, filed suit in Delaware Chancery Court against Murdoch, members of the News Corp board, James and Lachlan Murdoch, and News Corp COO Chase Carey. While the lawsuit mentions the phone-hacking scandal that brought down Murdoch's highly successful London tabloid News of the World , it goes well beyond that headline-grabbing debacle. It accuses two News Corp subsidiaries in the U.S., News America Marketing and NDS Group, of engaging in "a wide range of anti-competitive behavior." It cites News America's decision to settle lawsuits by rivals for $650 million and points out that News America broke into the computer systems of a rival, Floorgraphics, at least 11 times. Jay Eisenhofer, a lawyer representing the complaining shareholders said that the cases "establish a pattern of misconduct that extends far beyond [the U.K. hacking activity]. It demonstrates a corporate culture that allows this sort of misconduct to take place over a very long period of time." News Corp did not immediately respond to the allegations.