The widening phone hacking scandal surrounding of now shut down UK newspaper News of the World prompted an investigation in the U.S. on behalf of investors in News Corporation (NASDAQ:NWSA) shares over possible violations of Federal Securities Laws.

The investigation by a law firm focuses on potential violations of Federal Securities Laws in connection with the recently revealed phone hacking scandal surrounding the News of the World. On July 4, media reports surfaced that journalists at the News of the World have hacked on several occasions voicemails. For instance reported the UK Guardian about hacked voicemails in March 2022by News of the World journalists in connection with the disappearance of missing schoolgirl Milly Dowler, who was later found to have been murdered.. The Guardian said that the News of the World illegally targeted Milly Dowler and her family in March 2002, interfering with police inquiries into her disappearance and giving her family false hope. Following the developing phone hacking scandal several companies withdrew their advertising from the News of the World and on 7 July 2011, it was announced that the News of the World would be permanently closed that week with the last issue being produced on Sunday 10 July 2011.
On 8 July 2011 former editor Andy Coulson and former News of the World editor Clive Goodman were arrested. The same day it was reported that News Corp.'s Australian operations could come under federal government investigation into the implications for Australia of the phone hacking scandal.

On July 13, 2011, media reports indicated that News Corp could be investigated in the U.S. under the Foreign Corrupt Practices Act (FCPA), which 'forbids payments to foreign officials.'
The same day, the Guardian journalist who broke the story on July 7 said that his latest reporta bout the phone hacking schandal are only the beginning. The phone hacking scandal reportedly started as early as 2005 when News of the World tabloid published a story about Prince William suffering a knee injury, that it only could have known about by listening to the prince's messages.
The journalist said police had evidence that thousands of people reportedly ranging from celebrities like Hugh Grant, Gwyneth Paltrow, George Micheal, Mick Jagger, Eric Clapton, Jude Law, and Sienna Miller to politicians including former Deputy Prime Minister John Prescott had been targeted. However until the revelation of the hacking of the voicemail of murder victim Milly Dowler the public believed the phone hacking scandal only affected powerful people such as celebrities, sports stars, politicians and the royal family, who needed no help in battling the British tabloids. But the idea of journalist listening to messages left for a murdered schoolgirl proved to be too much and caused 168-year-old newspaper to shut its doors.

On Wednesday News Corp withdrew its bid for satellite broadcasting company British Sky Broadcasting Group plc, which it initially announced to acquire in June 2010 for 7.8 billion ($11.5 billion).

Directors of News Corp. face already an amended lawsuit over breaches of fiduciary duty by a group of investors that now also includes the phone scandal. The investors have amended their initial lawsuit, which was filed in connection with the acquisition of Shine, a television and film production company run by Rupert Murdoch's daughter Elisabeth to include the phone-hacking scandal as evidence of a long history of abuses. The plaintiffs said that 'these revelations show a culture run amuck within News Corp and a board that provides no effective review or oversight and that 'it is inconceivable that Murdoch and his fellow board members would not have been aware of the illicit news gathering practices.' The plaintiffs say that Murdoch has treated News Corp like a family candy jar, which he raids whenever his appetite strikes.'
News Corp. has performed well for its investors in the past. News Corps 12months Total Revenue over the past four filing periods went from $28.65billion to lately $32.77billion. News Corp was able to come out of a 12months Net Loss of $3.37billion reported on June 30, 2009 and report a Net Income of $2.53billion on June 30, 2010.

Shares of News Corporation (Public, NASDAQ:NWSA) rose from as low as $5.31 per share to over $18 on July 5, 2011.

However NASDAQ: NWSA fell due to the phone hacking scandal about $2.5 per share to under $15.50 per share on July 12 wiping of more than $6.5billion stock value.

On July 12, 2011 News Corporation announced that its Board of Directors has approved a stock repurchase program totaling $5 billion.

News Corp. stock rose on Wednesday, July 13 to $16.47 per share, but fell on Thursday to a close of $15.43 and fell during Fridays trading to under $15 per share.