Exxon Win Casts Doubt On Climate Securities Fraud Suits
By Keith Goldberg
Dec. 10, 2019
A New York state judge said Tuesday that state Attorney General Letitia James’ office failed to support its blockbuster allegations that Exxon made material misstatements about how it accounted for climate-related risks and that its climate disclosures had a material impact on investors. That’s the threshold for sustaining claims under the Martin Act, the powerful New York securities law that doesn’t require the government to prove fraudulent intent.
The judge’s conclusion that the state didn’t clear even that relatively low bar vindicates Exxon’s decision to fight the highly publicized claims at trial, said Ronald Colombo, a securities law professor at Hofstra University’s Maurice A. Deane School of Law. And it could embolden companies that face similar accusations to take their chances in court, he said.
“If I wanted to cite this case going forward … it would be for the proposition that speculative statements that are expressed as such with the proper cautionary language are unlikely to be deemed material,” Colombo said. “Investors know when you’re taking a best guess.”
Read the full article on the Law360 website.