Los Angeles Times: Judge Allows Shell Holder Suit to Continue: “A federal judge has allowed a stock fraud lawsuit against Royal Dutch Shell to continue…”: “The U.S. Department of Justice has also launched a criminal investigation, according to the opinion by U.S. Chief District Judge John W. Bissell.”: Tuesday 16 August 2005
By JEFFREY GOLD, AP Business Writer
NEWARK, N.J. — A federal judge has allowed a stock fraud lawsuit against Royal Dutch Shell to continue, finding that the shareholders had "adequately" shown reason for the court to examine their allegations concerning the company's restatements of its oil reserves.
The class-action lawsuit questions whether the company's statements on its reserves, an important measure of future performance, purposely omitted or twisted important facts.
Royal Dutch Shell PLC said Tuesday that it planned to appeal the ruling, questioning whether the court has jurisdiction "over non-U.S. purchasers who bought their securities on non U.S.-markets." The company is based in the Hague, Netherlands.
Restatements of the reserves last year led to stock declines, prompting shareholders to sue the oil company, some executives and its accounting firms, PricewaterhouseCoopers and KPMG. As a result of the ruling, the plaintiffs and defendants are to exchange information, which could include scheduling depositions. The case remains far from being presented to a jury.
The reduced projections also cost Shell, one of the world's largest oil producers with BP PLC and Exxon Mobil Corp., almost $150 million in fines imposed by U.S. and British regulators and led to the dismissal of three senior executives.
The U.S. Department of Justice has also launched a criminal investigation, according to the opinion by U.S. Chief District Judge John W. Bissell.
The judge said that the company's global footprint does not prevent it from being sued in New Jersey. Plaintiffs filed in the state because Shell has gasoline distribution terminals in the state.
A lead lawyer for the shareholders, Stanley D. Bernstein, said they were satisfied with the decision, even though it did dismiss several of the original counts against certain defendants.
Shell spokesman Simon Buerk, reached in London, said Tuesday, "The decision reflects a ruling at an early procedural phase of the case that presents the court's views on the scope of its statutory jurisdiction and the adequacy of plaintiffs' complaint. The decision does not reflect whether plaintiffs ultimately will be able to prove any of the claims they have alleged."
The Anglo-Dutch oil company, formally unified last month, resulted from the combination of Royal Dutch Petroleum Co. of the Netherlands, and Shell Transport & Trading Co., of London.
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