Ohio Attorney General Mike DeWine has filed a class action lawsuit against BP on behalf of his state’s public pension fund, alleging that the oil giant was unprepared for the massive Deepwater Horizon spill last April. DeWine says the company misled investors with statements suggesting that it was vigilantly monitoring possible safety issues.
According to the suit, BP made several statements assuring investors that strict safety standards had been put in place following other incidents prior to the Deepwater Horizon spill on April 20, 2010. The suit says that those statements provided false comfort to investors, inflating the company’s stock price and lowering its so-called “risk profile.”
The suit also claims that BP was overly optimistic after the spill occurred, misleading investors as to its ability to contain the spill. (For those that have forgotten, the well was finally sealed in late September -- five months after the initial explosion -- after several false starts.)
The suit says that BP’s allegedly misleading statements failed to warn investors of the risks that the company faced. In the wake of the spill, the value of BP stock fell by up to 48 percent.
“In the wake of the BP Deepwater Horizon spill, in addition to the tragic loss of life and environmental damage, pension systems providing retirement benefits for current and future retirees who invested in BP in good faith were adversely affected when stock prices plummeted,” DeWine said in a statement announcing the suit.
The suit is brought on behalf of the Ohio Public Employees Retirement System, State Teachers Retirement System, School Employees Retirement System, and Ohio Police & Fire Pension Fund.
Similar suit in NY
Last June, New York State comptroller Thomas DiNapoli brought a lawsuit in his role as trustee of the state’s $132.8 billion pension fund.
“It's my duty to protect the interests of the fund and the retirees and employees who rely on it,” DiNapoli said at the time. “BP misled investors about its safety procedures and its ability to respond to events like the ongoing oil spill and we're going to hold it accountable.”
DeWine’s suit comes several weeks after Mississippi Attorney General Jim Hood announced that he is asking the federal judge in charge of the multi-district class action against BP to take over his state’s Gulf Coast Claims Facility (GCCF) claims process.
Hood said that costs associated with the spill have been “improperly shifted to the State as a result of BP's failure to fulfill its obligations to compensate the individual and business claimants injured as a result of the oil spill.”