Seeking Alpha

Martin Fluck's  Instablog

Martin Fluck
Send Message
The publisher and editor of TheAngryAnalyst.com, I have a background in economics and currency strategy at Credit Suisse, and worked as a commodities trader and an equity analyst, before becoming a journalist. I wrote the Skeptic column for Dow Jones Newswires, and have reported on global... More
My blog:
The Angry Analyst
  • NEWS CORPORATION COULD FACE FORFEITURE OF ITS ASSETS IN THE US 0 comments
    Jul 9, 2011 5:03 AM | about stocks: NWS

    Because News Corporation has systematically been bribing police for information in the UK, the US Department of Justice has a slam dunk case to prosecute it under the Foreign Corrupt Practices Act, the Guardian reported this morning. This could allow the Federal Government to impose massive financial penalties, or even liquidate News Corp.

    The Department of Justice has ramped up its pursuit of companies and individuals under the act and has extracted big penalties. It’s now one of the highest law enforcement priorities in the US and nearly $2 billion was forfeited by US firms in 2009 and 2010.

    Its recent probe of Avon cosmetics has demonstrated its reliance on companies to self examine and then volunteer the results. Companies have an incentive to settle, if they are not to lose everything. In 2010 the Department of Justice required one privately-held company that violated the FCPA, to end operations and be dissolved.

    The prospect of News International’s acquisition of British Sky Broadcasting being approved has added several dollars to News Corp’s share price. Since the phone hacking scandal broke, its shares have only fallen back to $17, from $18. News Corp’s shareholders would be well advised to dump their stock next week, as there appears to be a lot more potential downside than investors realize. As Philip Stephens points out in the Financial Times, the British prime minister, David Cameron must now find a way to block Murdoch from securing full ownership of BSkyB. Otherwise, “the prime minister might just as well sign his own letter of resignation.”

    However, the BSkyB deal might be the least of News Corporation’s worries. Renault‘s announcement that it is suspending advertising in all of News International’s newspapers, suggests that the damage to its brands extends much further than The News of the World.

    Stocks: NWS
Back To Martin Fluck's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers
Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.