Posted on 29 Dec 2010
The lead plaintiffs in shareholder litigation against BP Plc and company directors and managers over investment losses suffered in the wake of the Gulf oil spill will be the New York and Ohio state pension funds, Bloomberg is reporting.
U.S. District Judge Keith P. Ellison in Houston named New York State Comptroller Thomas DiNapoli and Ohio State Attorney General Richard Cordray, who head their states’ public employee pension funds, as lead plaintiffs for investors who bought either BP common stock or American depositary receipts from June 2005 to June 2010.
Ellison also named four individual investors as lead plaintiffs for a smaller class of investors who bought common shares of London-based BP or ADRs from March 2009 to April 20 of this year, the date the Deepwater Horizon rig exploded, sparking the worst offshore oil spill in U.S. history.
While the sub-class of investors claim that BP’s leadership made misleading statements about drilling safety in the Gulf of Mexico in the months before the rig explosion, the state pension funds “argue more generally that BP made fraudulent statements between 2005 and 2010 about its safety precautions in the Gulf of Mexico and elsewhere,’’ Ellison said in yesterday’s order.
The New York and Ohio funds also claim substantial losses from BP ADRs purchased several weeks after the Deepwater Horizon explosion, a timeframe not covered by the complaint of the smaller group of investors, Ellison said. For six weeks after the blast, the funds claim “BP intentionally understated the oil flow rate in an attempt’’ to diminish harm to the company, lawyers for one of the institutional funds said in court papers.