Pomerantz Achieves Significant Milestone in Petrobras Securities Class Action - PBR
February 02 2016 - 5:49PM
In In re Petrobras Sec. Litig., 14-cv-09662-JSR, Pomerantz achieved
a significant victory on behalf of Petrobras investors when Judge
Rakoff granted in all respects Lead Plaintiff Universities
Superannuation Scheme’s Motion for Class Certification. In a
ruling issued today, Judge Rakoff certified a class of purchasers
of Petrobras investors that purchased or otherwise acquired the
Company’s securities on a U.S. exchange or through other U.S.
transactions between January 22, 2010 and July 28, 2015 for claims
under Sections 10(b) and 20(a) of the Securities Exchange Act of
1934. Moreover, for claims asserted under Sections 11,
12(a)(2) of the Securities Act of 1933, the Court certified a class
of all purchasers who purchased or otherwise acquired debt
securities through transactions occurring in the United States
issued by Petrobras, Petrobras International Finance Company S.A.
(“Pifco”) on/or traceable to public offerings made by these
entities on May 15, 2013 and March 11, 2014.
Significantly, the Court endorsed Pomerantz’
argument in favor of extending the class period by four months to
July 28, 2015, in order to account for alleged ongoing material
misstatements. That extension calls into question the
accuracy of Petrobras’ reported impairment charge related to the
fraudulent bribery scheme and illegal contract overpayments.
Pomerantz successfully alleged that Petrobras’ current financial
statements were likely to be materially false and misleading
because the Company severely understated the amount of overpayments
improperly capitalized. According to the Complaint, on April
22, 2015, and thereafter, Petrobras misleadingly reported only $2.5
billion as write-offs of overpayments improperly capitalized.
In reality, that amount is likely to reach double-digit numbers,
according to reports by the Brazilian federal police.
With respect to appointing Pomerantz as class
counsel: “On the basis not only of [ ] counsel’s prior
experience but also the Court’s observation of its advocacy during
the many months since it was appointed lead counsel, the Court
concludes that Pomerantz, the proposed class counsel, is
‘qualified, experienced and able to conduct the
litigation.’”
Jeremy Lieberman, Lead Counsel for the Class,
stated “we are very pleased with the Court’s ruling granting Lead
Plaintiff’s Motion for Class Certification. The fraud
conducted by Petrobras during the Class Period has eviscerated
billions of dollars in shareholder value, as well as hobbled the
political and economic structure of Brazil, one of the world’s
largest economies. Today’s ruling represents a significant
milestone in Plaintiffs’ efforts to recoup a significant portion of
the losses incurred by Defendants’ unprecedented scheme.”
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 on its balance sheet
by overpricing contracts to certain companies relating to its
refineries and operations and accepted 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.
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
CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
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