Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...
Brazil-owned oil and gas company Petrobras Brasileiro SA scored a partial victory July 7 in its bid to halt an investor lawsuit over its alleged concealment of a multi-year, multi-billion dollar money-laundering and kickback scheme ( Univs. Superannuation Scheme Ltd. v. Petrobras , 2017 BL 234491, 2d Cir., No. 16-1914-CV, 7/7/17 ).
The lower court erred when it certified a class of investors without considering the need for individual inquiries into whether the investors engaged in “domestic” transactions, required to state a federal securities fraud claim, the U.S. Court of Appeals for the Second Circuit said, vacating in part and remanding.
However, the district court didn’t abuse its discretion in deciding that another class of investors was entitled to a presumption they relied on Petrobras’ alleged misstatements under the “fraud on the market” theory, Judge Nicholas G. Garaufis said.
According to the investors, Petrobras was once the world’s fifth-largest company, with a market capitalization of $310 billion. By early 2015, its value had fallen to $39 billion, the investors said.
The appeals court decision marked a setback for the investors in the hard-fought appeal of the district court’s certification order—the docket included 220 entries, including several amicus briefs.
Nevertheless, plaintiffs’ counsel Jeremy Lieberman called the decision “important and favorable precedent in several respects.” In a statement emailed to Bloomberg BNA, he said the Second Circuit didn’t require his clients to show that determining membership in a class is "`administratively feasible.’”
Lieberman, a member of Pomerantz LLP, New York, also said that while the court vacated the lower court’s grant of class certification with respect to Petrobras bondholders, it did so “only to the extent” that the district court didn’t analyze the impact of a U.S. Supreme Court decision on whether legal and factual questions common to the class “predominated” over issues affecting only individual class members.
Counsel to the Petrobras defendants didn’t respond to an emailed request for comment.
The corruption scandal at Petrobras spawned numerous lawsuits, civil and criminal. The wide-ranging probe, known as Operation Carwash, has implicated sectors beyond the oil and gas industry, including aviation and construction. Late last year, Odebrecht SA, Latin America’s biggest construction company, and an affiliate agreed to pay more than $3.5 billion to resolve allegations they bribed Petrobras officials to win business, the largest corruption penalty ever levied by global authorities.
To contact the reporter on this story: Phyllis Diamond in Washington at email@example.com
To contact the editor responsible for this story: Seth Stern at firstname.lastname@example.org
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)