The feds are conducting an “ongoing criminal investigation” of Fox News Channel and whether it should have told investors it made payments to employees who alleged sexual harassment, an attorney alleged in court Wednesday.
Attorney Judd Burstein — who is representing former Fox News host Andrea Tantaros in a suit against the cable news network and its ex-chairman Roger Ailes — said one of his other clients had received a subpoena on Monday to testify before a federal grand jury.
“I was told by the U.S. Attorney’s office there is an ongoing criminal investigation, relating to these allegations, all of these allegations,” Burstein said, referring to the avalanche of sexual harassment claims that resulted in Ailes’ departure from the network he built.
The subpoena, issued by U.S. Attorney Preet Bharara’s office, noted “alleged violations of criminal law by Fox,” Burstein said.
He said the securities unit was leading the investigation.
Fox News, in a statement, separately confirmed that it had been in touch with the U.S. Attorney’s office “for months.”
A spokeswoman for Bharara declined comment Wednesday.
Burstein declined to reveal any details regarding his other client who had been subpoenaed. He expected Tantaros would receive one as well.
An attorney for Fox News, Andrew Levander, said the network had not received a subpoena — but would cooperate with one. It was “beyond the pale” for Burstein to bring up the investigation in open court, Levander said.
Burstein said Fox News’ payouts to female employees claiming sexual harassment are not disclosed in Fox’s SEC filings, which could be a violation of federal securities law.
A source told Bloomberg News that the investigation was examining whether those payments should have been disclosed to investors.
“The issue is do they have to report that to the SEC? If the answer is yes and they didn’t, that would obviously be a violation,” said Adam Slater, an attorney who practices class action and employment law and is not involved in the case.
“If they’re not required to, and they don’t disclose it, are the shareholders basically paying for Roger Ailes’s sexual harassment?”
The revelation came during a hearing in which Justice David Cohen ruled Tantaros must litigate her claims of sexual harassment and other violations against Fox in arbitration, rather than in court.
“The court granted Fox News’ motion to send Andrea Tantaros’ case to arbitration, where it always belonged, and rejected her counsel Judd Burstein’s histrionics. Apparently one of Mr. Burstein’s other clients has received a subpoena. Neither Fox News nor 21st Century Fox has received a subpoena, but we have been in communication with the U.S. Attorney’s office for months – we have and will continue to cooperate on all inquiries with any interested authorities,” Fox News said.
Tantaros sued Fox and Ailes for $30 million in August charging the network honcho ran “a sex-fueled, Playboy Mansion-like cult” where sexual harassment was rampant.
Tantaros, who joined Fox News’ “The Five” in 2011, said Ailes harassed her in August 2014 when he asked her to “twirl” during a private meeting in his office so she could show off her figure.
He also interrogated her about her personal life and “made off-color jokes about getting married,” according to the suit.
Burstein said that prior to filing her lawsuit, Fox News had offered her a $1 million settlement.
Both Fox News and Ailes have denied any wrongdoing.
In court filings, Fox News slammed Tantaros, saying she “is not a victim; she is an opportunist.”
Tantaros is one of numerous women who have come forward with similar accusations against Ailes, who stepped down last year after former Fox anchor Gretchen Carlson sued him. She was paid a $20 million settlement.
Burstein said he would file a new lawsuit against Fox and Ailes in Manhattan Federal Court alleging unlawful surveillance of Tantaros’s personal communications, as well as other charges. Ailes was said to have spied on employees.
“The conduct of Mr. Ailes is not the kind of conduct done in a vacuum. It needs co-conspirators,” Burstein said.
With GINGER ADAMS OTIS