Sexual harassment claims against former Fox News chief Roger Ailes have prompted a federal investigation of 21st Century Fox for settling those charges without telling shareholders, an attorney said Wednesday.
At a hearing in New York to determine whether arbitration was warranted regarding former Fox News personality Andrea Tantaros’ $50 million lawsuit against network executives, attorney Judd Burstein said he had been served a federal subpoena. Tantaros suit claims Fox News “operated like a sex-fueled, Playboy Mansion-like cult.”
Burstein said he received the subpoena two days ago for grand jury testimony from one of his other clients.
“Once I saw it, I knew what was happening,” Burstein said. “They were investigating whether Fox News violated securities laws by not reporting settlements to the Securities and Exchange Commission.”
Bloomberg reported the investigation centers on whether Fox should have disclosed the settlements to investors.
The U.S. attorney’s office declined to comment.
Outside of court, Burstein said Fox had offered $1 million to settle Tantaros’ suit.
Fox News attorney Andrew Levander said his client had not been subpoenaed and condemned Burstein’s statements.
Fox News has labeled Tantaros as an “opportunist” trying to benefit from Gretchen Carlson’s settlement with the network. Burstein has accused the network of harassing his client.
Carlson sued Ailes last summer and agreed to a $20 million settlement after alleging Ailes “sabotaged her career because she refused his advances.” Among the others accusing Ailes of harassment was Megyn Kelly, who recently signed with MSNBC.
The scandal eventually led to Ailes ouster.
Carlson attorney Nancy Erika Smith told Politico she has had not received a subpoena and was unaware of any federal investigation.
“The court granted FOX News’ motion to send Andrea Tantaros’ case to arbitration, where it always belonged, and rejected her counsel Judd Burstein’s histrionics,” Fox News said in a statement. “Apparently one of Mr. Burstein’s other clients has received a subpoena. 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.”