British oil giant BP has recently been accused by investors of lying about is safety commitments and of artificially inflating company shares for several years prior to the explosion of the Deepwater Horizon drilling rig last April.
Investors in ERISA plans that invested with oil giant BP are now filing a lawsuit against BP in federal court alleging the company committed securities fraud by misleading investors about its commitment to safety.
According to sources, BP management claimed the company would clean up its act after a Texas refinery exploded in 2005, killing 15 and injuring hundreds of others.
Among the investors suing the company to recover losses are the Ohio and New York state pension funds, which have been named as lead plaintiffs. Yesterday, plaintiffs filed an amended complaint claiming that the company didn't follow through on promises to ramp of safety and maintenance focus.
The suit currently being filed is an investor securities-fraud suit, and is one of hundreds of claims filed in the U.S. court system following last year's explosion. The investor claims have been combined with other shareholder claims in federal court in Houston.
Investors say that BP's misleading of investors constituted a violated U.S. securities law. Further, lawyers representing the investors say that BP continuously and systematically retaliated against employees that voiced concerns about the company's safety practices.
Ohio and New York state pension plans are currently attempting to attain class action status for the suit. Sources say they will seek to recover losses for investors in American depository receipts from January 2007 to May 2010, as well as U.S. investors who purchased ordinary shares on foreign markets during that time.
The explosion of the Deepwater Horizon rig and the resulting oil spill last year reportedly caused a sharp decline in BP stock, causing pension fund losses in the ballpark of $200 million.
Source: Bloomberg, "BP Misled Investors Before Gulf Spill, Lawyers Say," Margaret Cronin Fisk and Laurel Brubaker Calkins, 15 Feb 2011.