BP's other victims are its shareholders
BP's other victims are its shareholders
The settlement, which is the third-largest in SEC history, is based on the agency's claims that BP violated US securities laws when company executives filed false reports with the SEC and made false public statements about how much oil was flowing out of BP's well and into the Gulf of Mexico. The SEC announced that the money would be used to compensate investors for their losses by way of a Fair Fund.
I'm glad the SEC plans to get some money back to the BP investors who lost billions after the Deepwater Horizon spill because, at least for the vast majority of holders of BP common stock, that's their only hope of recovery from BP's (alleged) violation of federal securities laws. The oil spill took place in April 2010 and shareholder class actions followed quickly thereafter. But by the time the BP securities litigation was consolidated before US District Judge Keith Ellison of Houston in August 2010, you know what had happened: The US Supreme Court issued Morrison v. National Australia Bank, which held that investors have no cause of action under US securities laws for losses on foreign-traded shares.
In effect, the BP securities class action, at least for holders of BP common shares, was over before it started. Around 30 percent of BP shares are traded on US exchanges as American Depository Receipts. ADR holders, whose claims remain alive after Morrison, are still litigating their class action against
BP in Houston. They've survived BP's motion to dismiss and have been granted access to the evidence emerging in the consolidated personal injury litigation against BP in federal court in New Orleans.
According to co-lead counsel Steven Toll of Cohen Milstein Sellers & Toll, the ADR holders are fighting with BP's lawyers at Sullivan & Cromwell over whether investors can add some more potentially actionable alleged misstatements to their latest complaint, which already goes way beyond the SEC's assertions about oil flow rate misrepresentations.
But despite the best efforts of class counsel from Cohen Milstein, Berman DeValerio and Yetter & Coleman, holders of BP common shares have no viable federal claims against BP. The lead plaintiffs in the class action, state pension funds of New York and Ohio, lost almost $200 million in their investment in BP common shares, yet they won't recover any of it in the federal case.
Some of the common stockholders still have alternative routes to BP's wallet. They can't bring classwide claims based on state fraud laws, but several individual state pension funds with sizable losses have sued on their own, asserting state securities and fraud claims. BP has removed those cases to Ellison's federal courtroom in Houston, where they've just begun to be litigated. And according to class Toll of Cohen Milstein and Glen DeValerio of Berman DeValerio, a German law firm is soliciting BP shareholders for a potential case in the Netherlands, which permits a form of group litigation by shareholders. It's way too early to predict whether anything will come of that effort.
DeValerio and Toll were more resigned than angry when I spoke with them Thursday about BP's settlement with the SEC and what might have been in the shareholder class action. "It's encouraging from the point of view that the SEC's case developed the way we expected it to. This supports everything that we've said," DeValerio told me. Toll said that BP's admissions can only help in the ADR holders' ongoing class action. "I guess it makes me annoyed in general that Morrison is the law," Toll said. "It's just terrible for investors."
And just think: If it hadn't been for the drafters of Dodd-Frank, the SEC wouldn't have a case against BP either.
Morrison knocked out enforcement actions against foreign companies, but Congress restored the extraterritorial reach of the SEC and the Justice Department for securities violations when it passed Dodd-Frank reforms in July 2010, a month after the Morrison ruling. Dodd-Frank also included a provision requiring the SEC to present a report on Morrison's impact to Congress. You may recall that when the SEC issued that report in April, the commissioners declined to make recommendations about passing a law to roll back the Supreme Court's ruling.
DeValerio and Toll said no one should expect the BP example to change minds in Congress — and they're probably right. But it should.
— Alison Frankel writes On the Case blog for Thomson Reuters News & Insight.
The views expressed are her own.
Mohamed Salah viewing Champions League final against Real Madrid as ‘just another match’
- The Egyptian ace has been the key man in Liverpool’s march to Saturday’s showdown in Kiev against Real Madrid
- “Every match is different, this is my first Champions League final so I am very excited. It is of course a very important game”
He may be about to play in the biggest match of his life, but Mohamed Salah is going to approach the Champions League final as if it is just another game.
The Egyptian ace has been the key man in Liverpool’s march to Saturday’s showdown in Kiev against Real Madrid, scoring 11 goals and setting up a further four. Added to that has been his dynamic domestic form with the 25-year-old’s 32 LePremier ague strikes setting a new record and helping him land a host of awards, among them the coveted PFA Player of the Year gong.
All that has piled the pressure on Salah ahead of the final. But if you thought that would get to him then think again, with the Liverpool talisman claiming he is going into the clash as he would any other match.
“I cannot put more pressure on myself so I just play a normal game for me,” Salah said at a press conference announcing he is the new DHL brand ambassador for the MENA region.
“Of course, it is different, it’s the final of the Champions League, but you have to take it easy, relax and enjoy the game.
“Every match is different, this is my first Champions League final so I am very excited. It is of course a very important game.
“But I am trying not to take it too seriously and not put myself under too much pressure, both for me as an individual and the team as a whole.”
It should perhaps come as no surprise to hear the Liverpool and Egypt star talk about the biggest game in club football in such understated terms. Salah’s 44 goals have all come with the kind of smile on his face which suggests he is playing with a freedom normally associated with a kid having a kickabout with his mates in the park. Added to that, Liverpool’s progression to the final has come virtue of a devil-may-care attitude that hints that passion rather than pressure is what has been on their mind every time they walk onto the pitch.
That philosophy has been instilled to them by their coach Jurgen Klopp. The German is revered as much by the players as by Liverpool’s fans and Salah is in no doubt as to how important he has been to his form and the team’s remarkable Champions League run.
“From day one we are friends, he treats me like a friend,” Salah said of Klopp.
“We are very close to each other but still he’s the coach and I am a player. He is a great man and as a coach you can see everyone loves him.”
Standing in the way of Salah and Co. from lifting Liverpool’s sixth European Cup are Real Madrid. While the Spanish giants have not hit the heights of previous campaigns, they stand on the verge of a third Champions League crown in a row, and, with Cristiano Ronaldo in fine form, will provide the Reds’ toughest test yet.
Such has been the heights he has hit this season that Salah has often been compared to Lionel Messi and Ronaldo, and touted to become the first player since 2007 other than that duo to win the Ballon d’Or. It is a comparison he has sought to distance himself from and once again he downplayed any idea that the final was a case of him verses the Portuguese star.
“He is a top-level player, but as he said he plays with his right foot and I play with my left,” Salah said.
“We are both focused on playing well in the final and trying to win it for our teams. All I can do is try hard and focus on doing well for Liverpool.
“I want to get to a higher and higher level, I am hoping to do well in the final and we are going to go there to do well in the final and to try and claim the trophy.”