Exxon Mobil Securities Class Action Lawsuit
The well-known fuel company Exxon Mobil was recently hit with a securities class action lawsuit alleging a series of false or misleading statements. To learn more this case, visit Battea’s Exxon case summary.
Specifically, the suit – filed in the U.S. District Court for the Northern District of Texas – alleges that Exxon failed to disclose that its own internal reports recognized the threat of global climate change, and that as a result of shifting climatological issues a portion of its reserves were inaccessible. Further, the company is alleged to have inaccurately listed the price it paid for fuel regulations such as the carbon tax, potentially as a means of overstating the value of its reserves. The suit has a class period of Feb. 19, 2016 to Oct. 27 of the same year.
The oil giant Exxon Mobil is staring down a securities class action lawsuit.A closer look at the case
This issue came to light through a number of media reports in late summer and early August, as federal regulators started to take a hard look at Exxon’s reserve data, specifically as it relates to global climate change. In its third-quarter financial disclosures, Exxon then revealed that it had to write down almost 20 percent of its oil and gas assets which would not be profitable due to current fuel prices; that included 3.6 billion barrels of oil sands reserves and 1 billion barrels of North American reserves.
In addition, toward the end of October, the New York Supreme Court ruled that Exxon and accounting firm PricewaterhouseCoopers would have to bring forward documents related to the impact climate change had on its business, according to a report from E&P Magazine. This is part of a larger case brought by a coalition of state attorneys general to investigate Exxon’s efforts to downplay the effects of global climate change on its business. Exxon has said in the past that it believes the U.S. Securities and Exchange Commission should be the regulator to investigate its accounting efforts to determine their legality, rather than the attorneys general.
“We respectfully disagree with the court’s ruling and intend to take an immediate appeal,” Alan Jeffers, a spokesman for Exxon, told the publication.
The impact on stock prices
Exxon Mobil’s stock price has a year-to-date high of more than $95, set back in mid-July. However, the news of these investigations has dinged that price somewhat. After hitting a recent high of more than $89 in early September, it dipped to $83.30, one of the lowest prices seen since early in the year, when the stock price reached an ebb of just $71.55 per share. The price then recovered a bit throughout October before falling once again when Exxon disclosed its third-quarter financial standing at the end of that month, falling back into the mid-$83 range. Since then, the price has ticked up once again, and now stands at about $86.25 per share.
For more information on this case or other class action litigations, please contact Kevin Doyle, Senior Vice President, at 203-987-4949 or info@battea.com.