Two law firms have put the New York Times on notice that they may file a shareholder derivative lawsuit over the paper's handling of a contested story about alleged sexual violence during the October 7 Hamas attack and the internal review that followed, the Washington Free Beacon reported exclusively. The firms accuse the Times of "pushing false narratives" and failing to hold key personnel accountable, raising the prospect of courtroom scrutiny over editorial decisions at one of the most influential newsrooms in the country.
The legal threat centers on a December 2023 New York Times story that examined allegations of sexual violence committed by Hamas militants during the October 7 attack on Israel. That story, and the paper's subsequent internal investigation into one of its authors, Anat Schwartz, have drawn sustained criticism from multiple directions. The two firms now threatening suit argue that the Times' leadership breached fiduciary duties owed to shareholders by publishing a story they say contained false narratives and then conducting a review they characterize as a "softball investigation."
Anat Schwartz, a freelance filmmaker with no prior journalism experience, was brought on as a contributor to the Times' investigation into allegations of sexual violence on October 7. The story, titled "'Screams Without Words': How Hamas Weaponized Sexual Violence on Oct. 7," ran in late December 2023 and drew wide attention.
Problems surfaced quickly. Schwartz had liked social media posts calling for violence against Palestinians, including one that used the word "slaughter." The Times acknowledged the social media activity was a problem but did not pull the story. Critics also raised questions about sourcing and factual accuracy within the piece itself, including whether key claims about specific victims were adequately verified.
The Times eventually commissioned an internal review of Schwartz's work and the editorial process behind the story. That review was led by Times journalist Adam Platner. The two law firms now characterize Platner's review as inadequate, calling it a "softball investigation" that failed to address the core editorial and factual problems. The firms assert that the review was designed to shield leadership from accountability rather than to correct the record.
A shareholder derivative suit is a legal action brought by shareholders on behalf of the corporation itself, typically alleging that the company's officers or directors failed in their duties and caused harm to the company. In this case, the two firms argue that Times leadership damaged the paper's credibility and, by extension, shareholder value by publishing a story built on what they call false narratives and then failing to conduct a genuine investigation into the problems.
The legal threat letters accuse the Times' board and senior editors of breaching fiduciary duties. The firms contend that the decision to hire a contributor with no journalism background for a sensitive investigative piece, the failure to catch inflammatory social media activity before publication, and the allegedly superficial internal review all represent failures of corporate governance, not just editorial judgment.
No lawsuit has been filed yet. The threat letters represent a preliminary step. Under Delaware corporate law, where the Times is incorporated, shareholders seeking to bring a derivative suit typically must first demand that the board take corrective action or demonstrate that such a demand would be futile. The firms' letters appear to serve as that demand.
The Times is hardly the only major media organization facing legal heat. The paper is already contending with federal grand jury subpoenas served on four of its reporters over a leak investigation tied to Air Force One. That case put the newsroom on the defensive over source protection, a different legal front but one that compounds the institutional pressure.
Separately, the EEOC has sued the Times over allegations that the paper passed over a White male editor to meet diversity targets. Taken together, the Gray Lady now faces legal challenges touching its editorial practices, its employment decisions, and its corporate governance.
The broader media landscape tells a similar story. The New York Post reported that Paramount Global's chairwoman Shari Redstone has green-lighted settlement talks with Trump's representatives over his $10 billion lawsuit against CBS News. That suit targeted a "60 Minutes" interview with Kamala Harris that Trump alleged was deceptively edited. Redstone's push to settle appears driven by her desire to secure Trump administration regulatory approval for Paramount's merger with Skydance Media, a deal from which she stands to personally receive roughly $530 million.
CBS News president Wendy McMahon and "60 Minutes" executive producer Bill Owens are strongly opposed to settling, and staffers have warned of negative ramifications for press freedom. First Amendment attorney Theodore Boutrous Jr. told the Post that there is "absolutely no reason, from a legal perspective, for CBS to settle," calling the case "ridiculous." Yet the business incentives pushing Redstone toward a deal illustrate how legal exposure can reshape editorial independence when corporate interests are on the line.
The phrase "pushing false narratives" sits at the center of the law firms' threat. They argue that the Times did not simply make errors in a difficult story but actively promoted a version of events that could not withstand scrutiny. The accusation goes beyond sloppy journalism. It frames the editorial failures as a governance problem with financial consequences for the company and its shareholders.
The October 7 sexual violence story occupies uniquely charged territory. Allegations of mass sexual assault during the Hamas attack became a flashpoint in the broader debate over the Israel-Gaza conflict. Supporters of the Times' reporting argue that documenting sexual violence in wartime serves a critical public interest. Critics, including the law firms behind the current threat, contend that the Times published inadequately sourced claims and then resisted meaningful correction.
The internal review's credibility is central to the legal theory. If the Times can show that Platner's investigation was thorough and independent, the derivative suit theory weakens. If the firms can demonstrate that the review was designed to reach a predetermined conclusion, the fiduciary duty argument gains traction. Shareholders would need to show not just that the story had problems but that the board's response to those problems fell below the standard of care required under corporate law.
Investigators and outside observers will need to determine several open questions. The Times has not publicly detailed the scope of Platner's review or disclosed its full findings. The paper has not explained why Schwartz's social media activity was not flagged during the vetting process. And the Times has not stated whether any editors faced internal consequences for the story's shortcomings.
The law firms have not publicly identified the specific shareholders they represent or disclosed whether they have already made a formal demand on the Times' board. The timeline for any potential filing remains unclear. Derivative suits in Delaware can take months or years to move through the courts, and the board may attempt to resolve the demand internally before litigation begins.
The threat arrives at a moment when media companies across the industry are recalculating their legal exposure. Disney and Meta have both settled lawsuits with Trump. Trump has pressed forward with a defamation lawsuit against the BBC, asking a court to reject the network's dismissal bid. And Trump's family lawyer has demanded a retraction from the Times over a separate story, calling the report "libelous."
Shareholder derivative suits against media companies over editorial decisions remain rare. Most defamation and press-freedom disputes play out between the publisher and the subject of coverage. This case takes a different angle. It asks whether the people who run a publicly traded media company can be held financially accountable when editorial failures damage the brand.
The theory has limits. Courts have generally given corporate boards wide latitude under the business judgment rule, which presumes that directors act in good faith. Overcoming that presumption requires evidence of bad faith, self-dealing, or a conscious disregard of duties. The law firms will need to show more than editorial mistakes. They will need to show that the board knew about the problems and chose not to act, or that the internal review was so inadequate it amounted to a failure of oversight.
For the Times, the stakes extend beyond any single lawsuit. A derivative action would force discovery into internal editorial deliberations, potentially exposing communications between editors, reporters, and corporate leadership. That prospect alone may push the paper toward a resolution before a complaint is ever filed.
When newsrooms that lecture the public about accountability refuse to apply the same standard to themselves, the courtroom has a way of filling the gap.
