The City Pension Funds are seeking to recover investment losses caused by BP’s fraudulent statements issued prior to, and after, the April 20, 2010 Deepwater Horizon disaster, according to an announcement from City Comptroller John C. Liu. “BP failed to disclose to shareowners the serious risks involved in its offshore drilling operation,” Liu said. “After the spill began, it misleadingly attempted to minimize the extent of the damage and the cost to shareowners.”
Inga Van Eysden, chief of the New York City Law Department’s Pensions Division, added, “In light of the Supreme Court’s ruling in Morrison v. National Australia Bank, Ltd., the City Pension Funds are barred from seeking recovery from BP under federal securities laws for the vast majority of its losses. We strongly believe the Funds deserve to be compensated for BP’s fraudulent actions and are therefore pursuing this case.”
The complaint filed in the U.S. District Court for the Southern District of New York alleges BP and its officers and directors failed to disclose the material facts regarding the dangers inherent in the offshore drilling operation, the extent of the leak, and the estimated cost of the cleanup.
The New York City Pension Funds held a combined 2,822,840 shares in British Petroleum valued at $19,301,743.45 as of April 15, 2013. The transactional investment losses to pension beneficiaries caused by BP’s misconduct and fraudulent behavior are estimated to exceed $39 million.
Other public funds have filed similar lawsuits (see “Oregon Public Pension Sues BP”).