With discrimination claims and fired leaders, Fox News in hot seat

Did Fox News break securities law when it paid out settlements to alleged sexual harassment victims but labeled it as "salary and compensation"? It seems that is at least one topic of the ongoing federal investigation into the controversial news giant.

If so, the broadcaster may have the opportunity to make such payments legally. According to CBS News, 11 current and former Fox News employees have filed a class action alleging that leadership ignored their complaints and tolerated a "culture of severe racial harassment" for years.

The past couple of years have been bad for Fox News. Former host Andrea Tantaros sued former chairman Roger Ailes, accusing him of shocking sexual harassment. She also accused other executives of trying to shut down her complaints. They called her an opportunist, but Ailes ultimately resigned in disgrace.

Former network star Bill O'Reilly was recently forced out when he was accused by several women of quid pro quo sexual harassment. More than 50 advertisers pulled from his show.

The sexual harassment scandals had already resulted in a federal investigation in February, according to NPR. Their source was Andrea Tantaros's lawyer, who said another client of his had received a subpoena from the securities division of the U.S. Attorney's Office for the Southern District of New York.

Why would mislabeling settlements as compensation be illegal?

Fox has been defending and continues to vigorously defend itself against these lawsuits, and it appears the company is in the fight of its life. If top executives were openly fired due to allegations of sexual or racial harassment, that would be excellent evidence that a pervasive culture of harassment existed.

If Fox News hopes to deny future plaintiffs that ammunition, however, mislabeling the purpose of the payouts in its annual report is not the way to do it. That could be perceived by securities regulators as an intentional attempt to mislead investors about the company's legal situation.

The latest news is that the U.S. Postal Inspection Service has joined the investigation. The Postal Inspection Service is tasked with investigating crimes that take place using the mail, such as the distribution of contraband or mail fraud. If Fox News did intentionally mislead investors, the PIS may be looking into whether they used the USPS to carry out that fraud.

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