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Yahoo Sued Over Chinese Dissident Fund

Could Yahoo be adjusting the terms of its sale agreement to Verizon yet again?

A federal lawsuit was filed Tuesday in Washington against Yahoo alleging it had mismanaged millions in a fund for Chinese dissidents created as part of a 2007 agreement.

The suit was filed in the U.S. District Court for the District of Columbia.

Following allegations it had provided the identities of Yahoo users to China, Yahoo agreed to set up the $17.3 million trust fund, says the suit, and pledged it would assist dissidents imprisoned for speaking out online.

The suit, filed on behalf of some of the dissidents by law firm Cohen Milstein Sellers & Toll, alleges that fund was used for other purposes than the pledged humanitarian assistance and that, to date, only 4% of the original $17.3 million "has been used to provide aid to imprisoned dissidents." The suit asks that the fund be restored to its original amount, that Chinese dissidents be made the sole beneficiaries of the money, and seeks a full accounting of all the trusts, assets and expenditures.

Yahoo had not returned a request for comment on the suit at presstime.

In February, Yahoo agreed to cut the sale price by $350 million in the wake of data breaches affecting hundreds of millions of emails.

Currently the deal is valued at $4.48 billion in cash, with some closing adjustments, and was expected to close in second-quarter 2017.

Those breaches drew heavy scrutiny in Washington.

(Photo via Tori Rector's FlickrImage taken on July 21, 2016 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.