A federal court has made Ohio and New York public pension funds the lead plaintiffs in a lawsuit against BP. Ideastream’s Bill Rice reports the suit alleges BP committed securities fraud in connection with the gulf oil spill last summer.
Ohio Attorney General Richard Cordray accuses BP of issuing false and misleading statements about the company’s safety record, which led investors to believe the company harbored less risk than there, in fact, was – as brought to light by the explosion last summer of the Deep Water Horizon offshore drilling unit and the resulting spill.
Ohio’s four largest public pension funds joined the New York State Common Retirement Fund in bringing the class action suit against BP in July, and now a federal judge in Texas has officially named those funds the lead plaintiffs. Cordray, who is a Democrat, says Ohio gains an advantage in taking the lead in the suit.
Cordray: "It means that we will control both the lawsuit itself and any potential settlement talks and be able to maximize rtecovery for Ohio's workers and retirees."
The explosion and spill sparked a dramatic decline in the company’s stock. It was estimated that losses to the Ohio and New York funds were as high as 200 million dollars.
Cordray, who has aggressively mounted numerous lawsuits against companies for securities fraud during his single term, will leave office in January, having been defeated in November by former Republican Senator Mike Dewine. Asked whether he thinks Dewine might back out of the suit, Cordray replied:
Cordray: "That certainly would be his prerogative. i doubt that will happen. If it did happen, someone else would lead the lawsuit and I think it's better for Ohio to be able to be in the drivers seat on these things."
Dewine has said when he takes office he’ll join twenty other state Attorneys General in challenging the new health care law passed this year by Congress, something Cordray has refused to do. .