The feds are conducting an “ongoing criminal investigation” of Fox News Channel and whether Rupert Murdoch’s company hid from investors the payments it made to employees who alleged they were sexually harassed, an attorney alleged in court Wednesday.
Attorney Judd Burstein — who is representing former Fox News host Andrea Tantaros in a suit against the cable news network and its ex-chairman Roger Ailes — said one of his other clients had received a subpoena on Monday to testify before a federal grand jury.
“I was told by the U.S. attorney’s office there is an ongoing criminal investigation, relating to these allegations, all of these allegations,” Burstein said, referring to the avalanche of sexual harassment claims that resulted in Ailes’ departure from the network he built.
The subpoena, issued by U.S. Attorney Preet Bharara’s office, noted “alleged violations of criminal law by Fox,” Burstein said.
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He said the securities unit was leading the investigation.
Fox News, in a statement, confirmed that it had been in touch with the U.S. attorney’s office “for months.”
Burstein did not reveal any details regarding his other client who had been subpoenaed. He said he expected Tantaros would receive one as well.
Fox News lawyer Andrew Levander said it was “beyond the pale” for Burstein to bring up the investigation in court.
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Burstein said Fox News’ payouts to female employees claiming sexual harassment are not disclosed in Fox’s Securities and Exchange Commission filings, which could be a violation of federal securities law. A source told Bloomberg News that the investigation was examining whether those payments should have been disclosed to investors.
“The issue is, do they have to report that to the SEC? If the answer is ‘yes’ and they didn’t, that would obviously be a violation,” said Adam Slater, an attorney who practices class action and employment law and is not involved in the case.
“If they’re not required to, and they don’t disclose it, are the shareholders basically paying for Roger Ailes’ sexual harassment?”
The revelation came during a hearing in which Justice David Cohen ruled Tantaros must litigate her claims of sexual harassment and other violations against Fox in arbitration, rather than in court.
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“Neither Fox News nor 21st Century Fox has received a subpoena, but we have been in communication with the U.S. attorney’s office for months — we have and will continue to cooperate on all inquiries with any interested authorities,” Fox News said.
Tantaros sued Fox and Ailes for $30 million last August, charging the network honcho ran “a sex-fueled, Playboy Mansion-like cult” in which sexual harassment was rampant.
Tantaros, who joined Fox in 2011, is one of numerous women who have come forward with similar accusations against Ailes, who stepped down last year after former Fox anchor Gretchen Carlson sued him. She was paid a $20 million settlement.
A Bharara spokeswoman declined to comment.
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