Reuters: Watchdog lawyer sues Shell over reserves
Fri 25 June, 2004
By Joseph A. Giannone
NEW YORK (Reuters) - The army of lawyers swarming around Royal Dutch/Shell Group, which touched off a collapse in its stock price after it admitted inflating proved reserves, has been joined by a new, veteran member.
Securities lawyer William Lerach, famed for playing a lead role in many of the biggest shareholder class action suits of the past two decades, on Friday filed a shareholder derivative lawsuit against Shell and its top executives in a New Jersey state court.
The suit -- on behalf of the UNITE National Retirement Fund and the Plumbers and Pipefitters National Pension Fund -- alleges Shell executives failed to uphold their fiduciary duties and therefore violated the new Sarbanes-Oxley U.S. corporate reform law.
A Shell spokeswoman did not immediately respond to calls seeking comment.
Lerach's suit targets Shell and its executives, seeking unspecified monetary damages. It asks the court to force officers to return bonuses and compensation, based on overstated financial and operating performance, back to the company.
The 172-page suit also urges Shell to consolidate its unique dual-company structure, take steps to increase accountability and give shareholders the right to name three directors. Shell is 60 percent owned by Royal Dutch Petroleum, with the rest held by London's Shell Trading & Transport.