News Corp. shares tumble amid hacking fallout

AP News
Posted: Jul 18, 2011 2:12 PM
News Corp. shares tumble amid hacking fallout

Shares of News Corp. continued to decline Monday as the ongoing fallout from the British phone hacking scandal continued to weigh on the media conglomerate led by Rupert Murdoch.

On Sunday, Rebekah Brooks, who resigned from News Corp.'s U.K. media arm Friday, was briefly arrested as part of a widening police investigation of phone hacking and alleged bribery of police officers. She was released on bail following nine hours of questioning. Her lawyer, Stephen Parkinson, said she is innocent.

The widening phone hacking scandal also led to the resignation of Wall Street Journal publisher Les Hinton, who was installed as the head of Dow Jones when News Corp. bought it in late 2007. As it broadens, the scandal threatens to open up Murdoch and News Corp. to legal scrutiny and more public outrage.

In addition two top U.K. police officers resigned Sunday and Monday and British Prime Minister David Cameron has called for an emergency session of Parliament in response. The lawmakers were scheduled for a summer break starting Tuesday after questioning Murdoch, his son James and Brooks about the scale of the illegal actions at News of the World.

Staffers at the now-shuttered tabloid are alleged to have unlawfully accessed voicemail messages of politicians, members of the British royal family, sports figures, and crime victims in search of news scoops. None of News Corp.'s other media properties have been accused of illegal phone hacking.

Murdoch, who serves as CEO, owns 40 percent of News Corp.'s voting shares through a family trust.

News Corp.'s widely traded Class A shares fell 69 cents, or 4.4 percent, to $14.96 in early afternoon trading on Monday. The shares are down 15.5 percent since the end of June, compared with just 1.7 percent for the S&P 500 index.