Claims and Litigation
What are these claims?
Under securities law, a shareholder may file a lawsuit against an individual or corporation that misrepresented a “material” fact—one that a reasonable shareholder would think was important to an investment decision. A shareholder must show, among other things, that the individual or corporation acted with the intent to deceive or with severe recklessness, and that the shareholder suffered economic loss as a result of the misrepresentation. In addition, the Securities and Exchange Commission (SEC) may seek civil penalties for a misrepresentation of a material fact, as well as for misrepresentations in a statement or report.
What is the status of these claims?
Investor Suits against BP
Certain BP shareholders (including pension funds that purchased BP stock) filed lawsuits against BP and key officers. The shareholders allege, among other things, that BP misled investors about the safety of its Gulf operations and its internal risk-management practices, and that these misrepresentations resulted in dramatic investment losses for BP shareholders following the spill. On Aug. 10, 2010, shareholder actions were consolidated into a multidistrict litigation. In 2013, the court dismissed certain
claims against BP and its officers. Before the statute of
limitations expired in mid-2014, several pension funds and international institutions also filed
lawsuits. The lawsuits that have not been dismissed have yet to go to trial.
Investor Suit against Anadarko
Anadarko shareholders have filed lawsuits against Anadarko and key officers. The shareholders allege, among other things, that Anadarko made material misrepresentations regarding safety practices, risk management, insurance coverage, and the company’s involvement in the Macondo well, resulting in harm to shareholders after the spill. In July 2013, the court dismissed all but one of the claims. In May 2014, the parties agreed to settle the remaining claim for $12.5 million; the settlement was approved in September 2014.
SEC Settlement with BP
On Nov. 15, 2012, the SEC announced it had filed charges against BP, alleging that BP misled investors about the rate at which oil flowed from the Macondo well in reports filed with the SEC. The SEC accused BP of indicating a flow rate estimate of up to 5,000 barrels per day, despite internal data indicating the flow rate could be as high as 146,000 barrels per day. At the same time, the SEC announced that BP had agreed to settle the charges by paying a penalty of $525 million. The SEC has indicated that it plans to use the money to set up a fund for defrauded investors. The court entered a final judgment on the matter on Dec. 10, 2012.
Click on the claims below for more information:
DISCLAIMER: This overview is prepared for informational purposes only to inform individuals who are not involved in the litigation. It is not prepared for litigation and is not legal advice. Individuals with potential claims should consult with their own attorney. The information on this page is current as of September 2014.