The Heat Is On ExxonMobil
The State of New York has filed suit against ExxonMobil for misleading investors. According to the complaint, there is ironclad evidence that Exxon systematically lied when it said that it had factored in the costs associated with regulation re: the price of carbon into its financial future.
From the article linked above: Lawyers for Exxon Mobil Corp. stood before a New York judge in August and told the state’s attorney general to “put up or shut up” after spending three years investigating the company’s public disclosures about climate change, saying authorities should sue the energy giant or move on.
Request granted.
One could interpret this to mean that ruining the planet is one thing, but messing with Wall Street is beyond the pale. In fact, however, I suspect that this tack was taken because it’s more likely to end in victory for the state, and could expose additional vulnerabilities in the process.
Craig,
The State of New York has no more chance of winning this case, than any of the similar cases that have failed against Exxon.
The Federal Courts have already indicated that such cases are blatantly political and any success Attorney General Barbara Underwood may achieve in New York would be over turned on appeal to the US Supreme Court.
This case is a waste of taxpayer funds which would be better spent on benefiting the people of New York instead of employing already overpaid lawyers political ambitions.
Of course, I knew I’d be hearing from you on this as soon as I posted it.
It’s unclear to me how clear evidence of deceiving investors can be dismissed as “political.” I know you’re not from around here, but that’s a big deal around here.
Let’s see.
Craig,
This isn’t my judgement, but the discussion of several American courts.
To sustain a charge of wilful deception, implies a number of elements, the first (and most important) requires a loss of investor funds by concealing knowledge which caused a loss.
No such loss has occurred.
The knowledge must be irrefutable, not just opinion, and the consequences of the risk accessible by the Board of Directors at the time.
Since everyone was obsessed with the idea of peak oil, the issue was how to find more oil, not less. The issue of climate change was of minimal concern to the future of Exxon.
Another element to establish in any supposed deception is a bona fide complainant. The complainant must be able to prove a real loss that might have been avoided but for the deceptive, illegal or reckless action of the Directors.
Since Exxon has delivered astonishingly resilient profits and dividends, it’s difficult to see a real complainant stepping forward. The complainant would have to prove themselves genuine investors who bought and subsequently sold at a loss due solely to the directors deception.
The New York Attorney-General has no such complainant, instead relies on the esoteric right of acting in the “Public Weal”.
Technically, that enough to get a hearing, but not sufficient to mount a trial.
The are almost no supporters of these lawsuits among senior members of the American legal community.
An inevitable loss in NY will see the end of these grand standing politically motivated misuse of court resources.