Pomerantz represents Banco Safra SA, one of the largest banks in Brazil, in a class action against Samarco Mineracao SA, relating to the loss in value to the Company's bonds triggered by the Fundao dam-burst disaster.
The class action, filed in United States District Court, Southern District of New York, and docketed under 16-cv-08800, is on behalf of all purchasers of Samarco’s 10-year notes respectively due 2022, 2023, and 2024 between October 31, 2012 and November 30, 2015, both dates inclusive (the “Class Period”), seeking to recover compensable damages caused by Defendants’ violations of the Exchange Act of 1934 (the “Exchange Act”).
Samarco is a privately held Brazilian mining company. Its main product is iron ore pellets, made from minerals with low ore content and sold to steel makers worldwide.
The complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company’s Fundão tailings dam had longstanding systemic and structural defects; (2) despite representing to investors that Samarco had mitigated the risk of a catastrophic accident as much as possible through “a combination of risk management, careful evaluation, experience and knowledge,” Samarco had in fact ignored repeated, reliable warnings regarding the condition of the Fundão tailings dam; and (3) as a result of the foregoing, Defendants’ statements about Samarco’s business, operations, and prospects were false and misleading and/or lacked a reasonable basis.
On November 5, 2015, Samarco’s Fundão tailings dam burst, causing the downstream Santarem water dam to overflow, flooding 60 million cubic meters of land, decimating the indigenous village of Bento Rodrigues, and contaminating the Rio Doce River and the water supply for 200 towns with arsenic, lead, chromium and various other heavy metals.
When the truth about the Company’s operations was revealed by the collapse of the Fundão dam and investigation into its causes, the value of Samarco’s Notes significantly declined, harming investors.