"These revelations should not have taken years to uncover and stop," the bank said in the amended lawsuit filed July 8. "These revelations show a culture run amok within News Corp. and a board that provides no effective review or oversight."
Amalgamated, as a trustee for funds through which it holds almost 1 million News Corp. shares, sued the directors on behalf of the company in Delaware Chancery Court in Wilmington in March. The bank accused Murdoch of nepotism in the purchase of Shine Group Ltd., his daughter's U.K.-based television production company.
Question Of James
Investors may also be concerned the hacking probe could impede the ascension of Murdoch's son, James, who has been expected to eventually replace his 80-year-old father as chief executive officer, according to Needham's Martin.
"What the market is saying is that the succession of Rupert by James is being brought into question," said Martin, who rates the stock "buy" and doesn't own it.
James, 38, is deputy chief operating officer of News Corp. and since 2007 has overseen News International, the unit of the company that operates the U.K. newspapers.
In a note to employees to announce the closure of the News of the World, the younger Murdoch said the company had misled the British Parliament. During hearings in 2007 and 2009, executives including Les Hinton, former News International chairman, and Colin Myler, News of the World editor, said that there was no evidence that more than one reporter had been involved in phone hacking.
Money Or Power?
"I now know that I did not have a complete picture when I did so," Murdoch said, referring to his approval of out-of- court settlements to hacking victims, made in return for non- disclosure agreements. "That was wrong and is a matter of serious regret."
Teri Everett, a spokeswoman for News Corp., declined to comment.