Brazilian oil corporation, Petrobas, agrees to $3 billion securities fraud settlement

Shareholders of Brazilian oil giant, Petrobas, have obtained a nearly $3 billion settlement of a class action alleging that the energy company concealed kickbacks that top officials and their political patrons received in exchange for directing Petrobras to buy and build production facilities at inflated prices.

After the scandal emerged as part of a sweeping corruption investigation in Brazil, the price of Petrobras’ American depositary receipts plunged.

The settlement could also make shareholder suits tied to corruption claims a more attractive target than they have been. Shareholder or derivative actions filed in the U.S. in the wake of government actions to enforce the Foreign Corrupt Practices Act may now be viewed more favorably. Previously, a 2010 Supreme Court decision, Morrison v National Australia Bank, held that U.S. securities laws didn’t allow foreign investors to sue foreign and domestic defendants over shares they bought on foreign exchanges, but the Petrobras case managed to survive even though its lead plaintiff was an overseas investor and the defendant was a foreign issuer.

The case is Petroleo Brasileiro SA – Petrobras et al. v. Universities Superannuation Scheme Ltd., case number 17-664, in the Supreme Court of the United States.

Steve Larson
An experienced trial lawyer who handles both hourly and contingent fee cases, Steve has expertise in class actions, antitrust litigation, securities litigation, corporate disputes, intellectual property disputes, unfair competition claims, and disputes involving family wealth. Steve regularly represents individuals and businesses in federal and state court and has obtained class-wide recovery in multiple class actions. A veteran practitioner, Steve's clients value his creative approach to resolving complex litigation matters.


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