Pomerantz LLP has been appointed Lead Counsel in a class action lawsuit has been filed against Petróleo Brasileiro S.A. – Petrobras. The class action, filed in United States District Court, Southern District of New York, and docketed under 14-cv-9847, is on behalf of a class consisting of all persons or entities who purchased Petrobras securities between May 20, 2010 and November 21, 2014, inclusive (the "Class Period"). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the "Exchange Act").
Petróleo Brasileiro S.A. - Petrobras operates as an integrated oil and gas company in Brazil and internationally. Its Exploration and Production segment is engaged in the exploration, development, and production of crude oil, natural gas liquids, and natural gas; sale and transfer of crude oil in domestic and foreign markets; and sale of oil products produced at natural gas processing plants.
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 accepting 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's public statements were materially false and misleading at all relevant times.
Through a series of revelations including the arrests of members of senior management and the admission by the Company that it may have to adjust its historical financial statements to recognize the overpricing of construction contracts, Petrobras stock fell $8.88 per share, or approximately 46%, to close at $10.50 per share on November 24, 2014 from a price of $19.38 per share on September 5, 2014.