Amended News Corp. Lawsuit Says Hacking Claims Show ‘Culture Run Amuck’

Allegations of phone hacking at News Corp. (NWS)’s News of the World show a “culture run amuck” and indicate the board “provides no effective review or oversight,” Amalgamated Bank of New York said in an amended lawsuit.

Amalgamated, as a trustee for funds through which it holds almost 1 million News Corp. (NWSA) shares, sued the directors on behalf of the company in Delaware Chancery Court in Wilmington in March. The bank accused Chief Executive Officer Rupert Murdoch of nepotism in the purchase of Shine Group Ltd., his daughter’s U.K.-based television production company.

News Corp. announced last week that it would shut down the News of the World, the U.K. tabloid that had run stories about celebrities, sex scandals and murders since the Victorian era, amid claims that employees hacked into the voice mail of murder and terrorism victims and bribed police. The paper published its final edition on July 10.

“These revelations should not have taken years to uncover and stop,” according to an amended complaint filed July 8 and made public today. “These revelations show a culture run amuck within News Corp. and a board that provides no effective review or oversight.”

Murdered Schoolgirl

Allegations that messages left on a murdered schoolgirl’s mobile phone were intercepted caused a public outcry that prompted Prime Minister David Cameron to launch an independent inquiry into the matter. Bloomberg LP, the parent of Bloomberg News, competes with News Corp. units in providing financial news and information.

The close relationships between Murdoch and former News of the World editors Rebekah Brooks and Andy Coulson make it “inconceivable” that Murdoch and other board members wouldn’t have been aware of news-gathering methods at the newspaper, although New York-based News Corp.’s board “took no real action to investigate the allegations until July 7,” according to the amended complaint.

Teri Everett, a News Corp. spokeswoman in New York, didn’t immediately return a message seeking comment.

The case is Amalgamated Bank v. Murdoch, CA6285, Delaware Chancery Court (Wilmington).

To contact the reporters on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net; Phil Milford in Wilmington at pmilford@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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