Regulators and government investigators may not care if BP lied about those early low-ball flow rates or intentionally misled everyone into thinking deepwater drilling was safer than it was (and is), but the company’s shareholders are not so forgiving. Now a major class-action lawsuit, which could draw thousands of BP sharholders, has been formalized by a judge in Texas.
It turns out that some up-and-coming politicians will be the lead attorneys for the plaintiffs: New York State Comptroller Thomas DiNapoli and Ohio’s newly elected Attorney General Mike DeWine. It also turns out the public-employee pension funds are the largest holder of BP’s stock in the United States – which is another issue for another day.
In effect, the lawsuit alleges that BP lied for at least five years, going back to that Texas City oil refinery disaster in 2005 and including two oil spills in Alaska. The company made statements after those events to reassure investors, who now feel cheated. Then, the lawsuit will claim, the oil giant also lied about spill estimates to once again convince investors that things were better than they actually were.
U.S. Judge Judge Keith Ellison formalized the class-action this week, and we can add it to the milestones. Shareholder law, of course, represents an entirely different problem for the company, and it’s interesting that, along with the Big Oil companies, people like former BP CEO Tony Hayward are named individually.
Already, you have to wonder what the lawyers will find as they sift through five years of BP documents and statements. My guess is this will provide a very instructive glimpse behind the BP public-relations campaign.
The Independent out of the UK has a good report from its New York reporter here: http://www.independent.co.uk/news/business/news/bp-facing-new-legal-threat-over-gulf-spill-2171708.html
© Smith Stag, LLC 2010 – All Rights Reserved