NEW YORK, July 09, 2015 (GLOBE NEWSWIRE) -- On behalf of Lead Plaintiff Universities Superannuation Scheme Ltd. and a putative class of investors, Pomerantz LLP has secured a significant victory against Brazil’s oil conglomerate Petróleo Brasileiro S.A. – Petrobras (NYSE:PBR). The Company, together with a slew of Individual Defendants, is alleged to have perpetrated Brazil’s biggest graft and money-laundering scandal to date. Stemming well over a decade, Petrobras and the Individual Defendants stand accused of colluding to inflate bids, with Petrobras executives taking bribes and politicians sharing in the proceeds. The bribery and money-laundering scheme is estimated to have diverted tens of billions of dollars from Petrobras’ coffers. Pomerantz defeated Defendants’ many challenges to its securities fraud claims under Section 10(b) and Section 20(a) of the Securities Exchange Act, paving the way to discovery and prosecution of the case. Pomerantz also secured a victory against the underwriters of several multi-billion dollar offerings conducted on behalf of Petrobras during the class period, alleging violations of Section 11 of the Securities Act of 1933.
The class action, filed in United States District Court, Southern District of New York, is on behalf of a class consisting of all persons or entities who purchased Petrobras securities between January 22, 2010 and March 19, 2015, inclusive (the "Class Period").
Petróleo Brasileiro S.A. – Petrobras operates as an integrated oil and gas company in Brazil and internationally. Its Exploration and Production segment is engaged in the exploration, development, and production of crude oil, natural gas liquids, and natural gas; sale and transfer of crude oil in domestic and foreign markets; and sale of oil products produced at natural gas processing plants.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company overstated its property, plant, and equipment assets on its balance sheet by overpricing contracts to certain companies relating to its refineries and operations and accepting kickbacks from construction companies approved for those contracts; (2) the Company was receiving multi-billion dollar bribes from third party contractors to secure contracts from Petrobras; (3) the Company was in violation of its own Code of Ethics as its employees and executives were routinely accepting bribes from certain construction companies; (4) the Company's internal controls over financial reporting were ineffective and deficient; and (5) as a result of the foregoing, Petrobras' public statements were materially false and misleading at all relevant times.
At its height in 2009, Petrobras was the world’s fifth largest company, with a market capitalization of $310 billion. Now, amid the rampant money-laundering and kickback scheme, Petrobras’ market capitalization is less than $55 billion.
Jeremy Lieberman, Partner at Pomerantz LLP commented: “We are pleased with the Court’s decision today, which acknowledged the sufficiency of Plaintiffs’ pleadings against Defendants. The duration and scope of the fraud perpetrated by Petrobras and the Individual Defendants is unprecedented. We look forward to aggressively litigating our case and working to achieve a substantial recovery for harmed shareholders—the true victims of Defendants’ fraud.”
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.