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Former SEC Chair: SEC Should Investigate News Corp

The Security and Exchange Commission should investigate News Corp, the SEC’s former chairman Harvey Pitt told Larry Kudlow Tuesday.

Inquires are already underway in Britain, where the media empire's tabloid News of the World has been accused of hacking into the voicemails of thousands of people in search of stories. The paper, which was shuttered Sunday in response to the scandal, is also accused of bribing police officers and others for information.

But Pitt told Kudlow an investigation into Rupert Murdoch's company is needed on this side of the pond as well.

“Here you have a public company, US shareholders and the most reprehensible conduct imaginable that has been destructive of shareholder value,” he said. “I think this is a situation where certain statements that have been made to the public turn out not to have been accurate or correct.”

Stocks have taken a hit since the scandal broke, prompting News Corp to announce a plan Tuesday to buy back as much as $5 billion worth of stock over the next year.

Pitt admits the stock is still has a highly capitalized share price, but said the company’s actions should still come under scrutiny.

“The fact of the matter is that when you take actions like these that the company has done, without any semblance of real corporate governance, you run a substantial risk that you have created a fair field of litigation for shareholders who will complain that there was nobody, no adult, watching the store.”



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Questions? Comments, send your emails to: lkudlow@kudlow.com