BP's other victims are its shareholders

Updated 18 November 2012

BP's other victims are its shareholders

NEW YORK: As part of BP's historic $4.5 billion deal Thursday to resolve criminal and civil charges related to the Deepwater Horizon oil spill in 2010, the British oil company agreed to pay a $525 million penalty to the Securities and Exchange Commission for defrauding its own investors.
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.

AS IT HAPPENED: Al-Hilal 2 v. Al-Ittihad 1 - Saudi Super Cup, London

Updated 19 August 2018

AS IT HAPPENED: Al-Hilal 2 v. Al-Ittihad 1 - Saudi Super Cup, London

LONDON: Carlos Eduardo ended months of anguish and heartache by firing Al-Hilal to Saudi Super Cup glory at a bouncing Loftus Road stadium on Saturday night.

Eduardo has been out of action since suffering a cruciate knee ligament injury in December and he must have wondered at times if he would ever play again, let alone reach the exalted level he was playing at pre-injury.

But the Brazilian playmaker announced his return to full fitness, upstaged debutant Omar Abdulrahman, and showed there is plenty of life left in him yet by scoring the first goal after 35 minutes. The way he frenziedly celebrated, with a knee slide to the corner flag, summed up just how much this goal meant to him and was clearly a release of months of frustration. 

Gelmin Rivas made the game safe for Al-Hilal with a second just past the hour mark and although Karim El-Ahmadi pulled one back for the Tigers, there could be doubting the Saudi Pro League champions were worthy winners of this full-blooded encounter. They were just too quick, too nimble and too potent for an Al-Ittihad side who are looking to rebuild under new coach Ramon Diaz.

Al-Ittihad gave it a good go and huffed and puffed, but Al-Hilal just had too much quality in attack to the extent that they were able to leave the prolific Omar Khribin on the bench for 75 minutes. It will take some side to prevent Al-Hilal from winning the league title for a third straight season on this evidence.

They were by far the busier and more progressive of the two sides early on and Al-Ittihad were struggling to keep up with their slick movement. Indeed, crude fouls on Eduardo and Salem Al-Dawsari neatly summed up how they were desperately clinging on to Al-Hilal's coat tails. 

Al-Ittihad's defenders had their work cut out with the fluid movement of Al-Hilal's attacking players and it look a last-ditch tackle from the excellent Hassan Moaz to prevent Rivas from connecting with Andre Carrillo's low centre and scoring what would have been a certain goal after ten minutes. From the resulting corner, Al-Dawsari, unmarked and unchallenged, should have buried a header from an Abdulrahman corner, but he failed to even find the target.

Then Al-Dawsari, back from a loan spell at Villarreal, saw a shot deflected wide when he really should have played in Yasir Al-Shahrani on the overlap. But the goal you felt was coming and it arrived on 35 minutes, Eduardo ramming home a cross from Carrillo. It was the least Al-Hilal deserved for their vibrant start. 

The nearest Al-Ittihad came to troubling Ali Al-Habsi in the Al-Hilal goal was when Wanderson looped a header straight into his arms. It wasn't exactly one-way traffic, but it wasn't far off.

Diaz needed to make a change at half-time as Al-Ittihad were being over-run, but instead of shoring things up, the coach made an attacking switch, bringing on Serbian summer Aleksandar Pesic to spearhead the attack. It was a bold move.

It did nothing to shift the momentum, really. Just four minutes into the half, Al-Hilal were on the front again, Mohamed Kanno latching onto a through ball from Al-Dawsari to fire a rising half volley at Assaf Al-Qarni. You felt it was only a matter of time before Al-Hilal scored against and they did so on 62 minutes, Rivas rounding Al-Qarni to roll the ball into the empty net. The Al-Hilal fans went wild, believing that was game, set and match. The trophy, they felt, was theirs.

But Al-Ittihad refused to roll over and just minutes after Jonas forced a flying save from Al-Habsi, Moroccan international El-Ahmadi pulled one back. It was now game on with 23 minutes remaining.

Yet Jorge Jesus, the Al-Hilal coach, showed no signs of shutting up shop and he went for a third instead of holding onto the 2-1 lead by introducing Khribin for Abdulrahman with 15 minutes left. It made for a thrilling finale, as both sides threw the kitchen sink at each other, but Al-Hilal held on to win the trophy for the second time. 


Al-Hilal: Al-Habsi; Al-Burayk, Botia, Al-Bulayhi, Al-Shahrani; Kanno, Abdulrahman; Carrillo, Al-Dawsari, Eduardo; Rivas.

Al-Ittihad: Al-Qarni; Moaz, Jurman, Hassan, Thiago; Jonas, El-Ahmadi, Villanueva, Wanderson, Al-Muwallad; Romarinho. 


20:15 - FULL-TIME: AL-HILAL 2 V. AL-ITTIHAD 1: No, they can't - and it's a first Super Cup trophy for Al-Hilal! Omar Abdulrahman wins his first trophy with the Saudi club and it's the Blues who take the first title of the year...

20:00: GOAL - Karim El-Ahmadi gives Al-Ittihad hope of a famous come-back...can they turn this match around?

19:55: GOAL - 2-0 to the Saudi champions, Rivas with the goal this time...

19:45: It's still 1-0 to Al-Hilal, Al-Ittihad pressing to get back into the game, but nothing doing so far...


19:35: We're under way in the second half, and Al-Hilal are looking comfortable. Will it be back-to-back league titles for the 'Crescent' this season?

HALF-TIME: It's Al-Hilal who go into the break ahead, thanks to that Eduardo goal.

19:05: GOAL - Al-Hilal take the lead in the 35th minute through Eduardo after he smashes home from a Carillo cross. Advantage to the champions of Saudi Arabia...

19:00: Ever wondered what Loftus Road and west London looked like? The Saudi Super Cup official channel have made this very handy video...

18:55: Both teams working hard, but little end-product from either. Tentative start from both sides.

18:45: Look who's working tonight's game - former Chelsea and England star John Terry and Egypt's Mido...



18:40: Cagey start from both sides, crowd in good voice. Al-Hilal looking slightly better, but Al-Ittihad's fans making more of the noise...

18:20: Excitement is building in west London ahead of the Saudi Super Cup, with both teams looking for their first title...




18:15: Al-Hilal and Al-Ittihad go head-to-head in the Saudi Arabian Super Cup at Loftus Road in west London on Saturday evening, follow live updates here with Arab News.