Articles Tagged with BP

A number of pension funds in the US are suing BP (BP) for fraud. The institutional investors, including funds for public workers in Texas, Louisiana, and Maryland, and Bank of America’s (BAC) private pension plan, claim, that the corporation bilked them when it made misstatements about the Deepwater Horizon oil spill in 2010. Also bringing securities fraud causes against the oil company, just within the statute of limitations, are a number of foreign institutions.

The oil spill claimed the lives of 11 people. It is considered the worst offshore spill in US history. According to Reuters, BP is now the defendant in numerous securities fraud cases filed by at least 20 institutional investors contending that their investment managers were influenced by misrepresentations the company made when they deciding whether to purchase BP shares. The securities lawsuits claim that BP violated British securities and fraud laws when misrepresenting it safety record and the extent of the oil spill.

It was in 2010, when the Supreme Court issued its decision in Morrison v. National Australia Bank that foreign-based companies in general obtained immunity from securities fraud claims. In that lawsuit, the nation’s highest court held that American securities laws couldn’t be applied beyond the borders of the United States. Trial courts took this to mean that companies found on foreign exchanges cannot be sued for fraud under the Exchange Act of 1934—save for claims made by investors that traded in American Depository Shares.