Canadian Investor BP Securities Fraud Class Action Investigation
Canadian Investors: If you were invested in BP stock at the time of the Gulf of Mexico oil spill and you suffered investment losses, your losses in BP stock may not be covered in a pending US securities fraud class action. Contact us know to understand your rights and to see if you qualify for a pending Canadian lawsuit.
Underlying facts that give rise to securities fraud allegations
This is an unusual securities class action case insofar as the underlying facts are well known to all: On April 10, 2010 an oil well in the Gulf of Mexico blew, sinking the Deep Sea Horizon oil rig and eventually releasing over 4 million gallons of oil into the Gulf of Mexico. The resulting environmental catastrophe is well documented, and BP is expected to pay close to $40 billion in clean up costs, government fines and reimbursements to businesses for lost revenues.
BP investors suffer extraordinary losses
BP’s role in the environmental catastrophe has had a profound impact on BP shareholders. Prior to April 10, 2010, BP stock traded over $60 a share, giving BP a market cap of over $190 billion. Immediately after the disaster, BP shares traded as low as $29 per share, or a $92 billion market valuation. Over $100 billion in market value vanished in only a few weeks. Years later in early 2013, BP stock hovers near $43 per share, giving it a market value in early 2013 of roughly $140 billion.
Summary of relevant capitalization structure of BP
BP is a large multi national oil company with operations in over 88 countries. BP is however a British company and its ordinary shares (common stock) is traded on the London Stock Exchange under the symbol “BP”. As is common with large non-US based companies, BP shares are traded on the New York Stock Exchange as an american depositary share ("ADS"). An ADS is a vehicle for foreign corporations to list their ordinary equity on an American stock exchange. To recap, an investor that purchased BP stock on the London Stock Exchange purchased the BP ordinary shares (referred to as “BP Ordinary Shares”). An investor that purchased BP stock on the New York Stock Exchange purchased BP ADS (referred to as “BP ADS”).
Canadian residents could have purchased either forms of BP stock
A canadian resident that purchased BP stock could have purchased either the BP Ordinary Shares from the London Stock Exchange or the BP ADS from the New York Stock Exchange. In fact it is quite probable that an investor residing in Canada has little need to know the difference. It however makes a big difference under US law.
BP ADS shareholders may receive partial reimbursement of losses
In the United States, large US-based institutional investors have brought a securities class action against BP and certain officers and directors. In general, the underlying theory of that case is that BP made false and misleading statements to investors as (1) BP was not committed to process safety because the BP continued to expand its deepwater operations without implementing adequate process safety procedures; (2) BP misrepresented its risk profile by failing to disclose the “multiple safety failures and near-failures” that BP experienced in its deepwater drilling operations; (3) BP represented that it did not retaliate against workers who raised safety concerns with BP when, in fact, BP was aware that numerous, substantiated complaints of retaliation had been submitted to BP; (4) BP implemented budget cuts and staff reductions which undermined BP’s ability to drill safely in the Gulf of Mexico; and (5) BP’s safety program failed to require uniform process safety policies, instead allowing BP to implement practices that varied country by country.
Procedurally, the federal court in the United States has allowed only BP ADS shareholders to proceed in this action, so those shareholders stand a reasonable chance of recovering a portion of their investment losses.
US law excludes BP Ordinary Shareholders from the US action
The same court that allowed BP ADS shareholders to move forward with a securities fraud action, specifically denied the right of BP Ordinary Shareholders from the pending securities class action.
Canadian BP investors take action to preserve your right to recover
If you were a BP shareholder at the time of the Gulf of Mexico oil spill and you resided in Canada, please complete the form on this web page. It may help you recover some of your investment losses. You may also contact George Pressly, Esq. directly at 1 (800) 631-6234.