What Shareholder Suits Over the Fox Sex Harassment Scandal Might Look Like

The Fox News-Roger Ailes sexual harassment scandal has created plenty of headaches for parent company 21st Century Fox. Here’s another one: potential shareholder litigation. At least three plaintiffs law firms are looking at possible suits alleging harm to investors.

There are two basic approaches such suits could take, according to Daniel Sommers, a partner with Washington, D.C.-based Cohen Milstein, one of the firms considering taking legal action. The more obvious and promising strategy would be to sue 21st Century Fox on a theory that its officers and directors breached their “fiduciary duty” to the company and its shareholders, he said. Such an alleged breach would have happened, the argument goes, if they failed to step in much earlier to prevent the sexually tinged misbehavior that’s been attributed in court papers to Ailes.