News Corp. Reaches $139M Settlement Over Phone Hacking

by Christopher Freeburn | April 22, 2013 12:15 pm

news corp rupert murdoch building 630 300x225 News Corp. Reaches $139M Settlement Over Phone Hacking[1]News Corp.’s (NASDAQ:NWSA[2]) has settled a shareholder lawsuit over corporate governance complaints[3].

Under the terms of the deal, announced on Monday, the media giant will pay $139 million to settle claims related to the behavior of top company officials during the telephone hacking scandal that damaged its U.K. newspaper business. The company will fund the settlement with $139 million in payments from its insurance providers, the New York Times noted.

The lawsuit was originally filed over News Corp.’s $670 million acquisition of a company headed by Rupert Murdoch’s daughter. In the wake of the telephone hacking scandal in Britain, shareholders amended the suit to include allegations that the company failed to properly oversee its employees.

News Corp. has also agreed to implement measures meant to tighten compliance with corporate governance rules[4] and will establish an anonymous hot-line for whistleblowers at the company. It will have also disclose shareholders’ political contributions, The Hollywood Reporter noted.

Fallout from the telephone hacking scandal, which led to the closure of News of the World, has cost News Corp. about $224 million. The company has settled with a number of celebrities whose phone accounts were allegedly hacked by its newspapers[5].

Shares of News Corp. rose fractionally in Monday midday trading.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2012/06/news-corp-rupert-murdoch-building-630.jpg
  2. NWSA: http://studio-5.financialcontent.com/investplace/quote?Symbol=NWSA
  3. shareholder lawsuit over corporate governance complaints: http://www.nytimes.com/2013/04/23/business/media/news-corp-agrees-to-139-million-settlement-with-shareholders.html?partner=yahoofinance
  4. implement measures meant to tighten compliance with corporate governance rules: http://www.hollywoodreporter.com/thr-esq/rupert-murdochs-news-corp-settles-443914
  5. whose phone accounts were allegedly hacked by its newspapers: http://investorplace.com/2013/02/news-corp-to-pay-sarah-ferguson-other-celebs-over-phone-hacking/

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