Yahoo.com: Scott + Scott, LLC Files Class Action against Royal Dutch Petroleum Company as SEC Announces Formal Investigation
Press Release Source: Scott + Scott, LLC
Monday February 23, 9:10 am ET
Scott + Scott, LLC Represents Securities Purchasers in Yet Another Restatement Accounting Fraud Case
COLCHESTER, Conn., Feb. 23 /PRNewswire/ -- Scott + Scott, LLC (email@example.com or firstname.lastname@example.org), a law firm based in Connecticut with offices in Ohio and California, announces that it has filed a securities fraud action on behalf of purchasers of the securities, including the common stock traded in overseas markets and the American Depository Receipts trading on the NYSE, of Royal Dutch Petroleum Company ("Royal Dutch") (NYSE: RD - News) and/or The Shell Transport and Trading Company, PLC ("Shell Transport") (NYSE: SC - News) between December 3, 1999 and January 9, 2004, inclusive (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934 (the "Exchange Act"). A copy of the complaint filed in this action is available from the Court, or can be viewed at www.scott-scott.com. You can contact Scott + Scott, LLC at 800/404-7770 (CT time) or 800/332-2259 (CA time).
On February 19, 2004, the Royal Dutch/Shell Group announced that the Securities and Exchange Commission had begun a formal investigation into the Company's surprise restatement of its oil and natural gas reserves.
The action is pending in the United States District Court for the District of New Jersey against defendants Royal Dutch, Shell Transport, Shell Petroleum N.V., the Shell Petroleum Limited, Maarten van der Bergh, Judy Boynton, Malcolm Brinded, S.L. Miller, Harry J.M. Roels, Paul D. Skinner, M. Moody- Stuart, Jeroen van der Veer, and Philip R. Watts. According to the complaint, defendants violated federal securities laws (sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and all amendments thereto) by issuing a series of material misrepresentations to the market during the Class Period.
The complaint alleges that defendants deliberately violated accounting rules and guidelines relating to oil and gas reserves which resulted in a material overstatement of oil and gas reserves, the eventual disclosure of which damaged purchasers of Royal Dutch and Shell Transport securities and negatively impacted the investment community. The complaint alleges that Royal Dutch and Shell Transport had classified and reported, in SEC filings and other public documents, certain reserves as "proved reserves" from a project off the western coast of Australia called the Gorgon Joint Venture (and other projects in Nigeria). In fact, without the investors knowledge, the reserves did not meet SEC and industry requirements necessary to be classified as "proved," and were improperly reported as such in Royal Dutch's and Shell Transport's financial reports. These reports were therefore materially and artificially inflating a key measure of the companies' financial position and competitive standing. As a result of these material misrepresentations, Royal Dutch and Shell Transport's true value in the marketplace was severely overstated and misunderstood.
On January 9, 2004, Royal Dutch announced that it was going to write-down its proved oil and gas reserves by 20%, or 3.9 billion barrels, from 19.5 billion barrels to 15.6 billion barrels. The write-down: (a) cut Shell's reserve life from 13.4 years to 10.6 years; (b) increased its worldwide 5-year average reserve replacement cost per barrel from $5.49 to $12.57 -- $7.06, or 128% greater than the industry average of $5.51; (c) increased Shell's finding and development costs to $7.90 per barrel -- well above the costs of its competitors; and (d) reduced Shell's Appraised Net Worth downward by up to 7.1%, or $9.6 billion. Following the announcement, Royal Dutch ADRs fell 7.87% from $52.76 to $48.61 on the NYSE and Royal Dutch ordinary shares fell by 7.10% from the U.S. equivalent of $52.91 to $49.15 on the Amsterdam exchange. Shell Transport ADRs were down 6.96% from $44.81 to $41.69 on the NYSE and Shell Transport ordinary shares were down 6.84% on the London exchange from the U.S. equivalent of $7.36 to $6.86. In addition, Moody's placed the AAA rating of Royal Dutch and Shell Transport under review for possible downgrade because the write-down materially and adversely affected the companies' reserves-to-debt ratio.
Following the belated disclosure, most analysts and commentators concluded that, because of the magnitude of the write-down and the clear SEC and industry guidelines relating to reserve classification, the reserve overstatements could not have been a result of error or accident, but rather, that the reserves were knowingly overstated to preserve the companies' credit rating and to shore up their competitive position.
If you bought the securities (including ordinary shares and/or ADRs) of Royal Dutch and/or Shell Transport, between December 3, 1999 and January 9, 2004 and sustained damages, you may, no later than March 26, 2004, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff."
Scott + Scott, LLC, a Connecticut-based law firm with offices in Ohio and California, is a law firm with a national practice and reputation. Scott + Scott has dedicated itself to client communication and satisfaction. The firm is currently litigating major securities, antitrust and employee retirement plan cases throughout the United States and represents pension funds, charities, foundations, individuals and other entities worldwide -- both as class and non-class cases. Any member of the purported class may move the Court to serve as lead plaintiff. Signing and retaining Scott + Scott, LLC does not automatically make you a lead plaintiff. If you wish to serve as lead plaintiff, you must move the Court no later than March 26, 2004. If you wish to discuss this action with an attorney or have any questions concerning this notice or your rights, please contact attorney Neil Rothstein at email@example.com
or by calling 1-800-332-2259. Scott + Scott, LLC is located at 108 Norwich Avenue, Colchester, CT 06415; phone: 860/537-3818; fax: 860/537-4432.