While the trial in London of Rebekah Brooks and other News Corp-linked executives over alleged telephone hacking continues, Rupert Murdoch, James Murdoch, and several other top News Corp officials will not face similar accusations in the US.
A decision released by US District Judge Paul Gardephe in New York stated that News Corp Chairman Rupert Murdoch could not be held liable over statements made that predated the period for which shareholders sought to recoup alleged losses.
The claims came in a shareholder action led by Britain’s Avon Pension Fun which argued that a series of statements, conference calls, press releases and other material issued by News Corp, Murdoch, Brooks and other key executives in the years after the 2006 arrest and subsequent jailing of reporter Clive Goodman, implied that the Goodman incident was a one off. The claim also argued that News Corp stock fell 17 per cent in two weeks and stymied News Corp’s plan to buy BSkyB.
Judge Gardephe concluded that “nearly all” of the alleged false statements predated the class period and that the defendants had no duty to correct them. “To hold otherwise would require adopting an ‘endless breach argument’, which would permit plaintiffs to circumvent the well-settled rule that defendants are liable only for those statements made during the class period,” he ruled. Gardephe gave the plaintiffs until April 30th to file an amended complaint. His decision was dated March 31st.