DALLAS – A federal judge partially denied a motion to dismiss a lawsuit against Exxon Mobil and several corporate officials over allegations of securities fraud.
The judge considered the consolidated motion to dismiss, along with a motion to strike a declaration, an affirmation and allegations made in the complaint relied on the testimony of Dr. Charlotte J. Wright and John Oleske.
U.S. District Judge Ed Kinkeade of the Dallas Division of the Northern District of Texas noted that because it was inappropriate to consider expert opinions at this stage in the litigation, the court must grant in part and deny in part the motion to strike, according to an Aug. 14 memorandum opinion and order.
Kinkeade denied in part the motion to dismiss because he found that Greater Pennsylvania Carpenters Pension Fund, the lead plaintiff, sufficiently argued the misstatements and loss causation from the complaint.
The judge granted the motion to dismiss as it pertained to defendant Jeffrey J. Woodbury's alleged securities fraud under Section 10(b) and Rule 10b-5, but denied the motion pertaining to Section 20(a).
The pension fund argued that there were misrepresentations and omissions made regarding publicly traded stock between March 31, 2014, and Jan. 30, 2017.
A report was issued on March 31, 2014, in which Exxon noted a proxy cost of approximately $60 per ton in 2030 and $80 per ton in 2040. However, by mid-2014, oil and gas prices began to fall.
When prices fell, several companies were forced to write off or abandon more than $200 billion worth of oil and gas reserves, the opinion states.
Exxon did not write off or abandon its assets. It then assured its investors that there was nothing to worry about, which the pension fund alleged was misleading to do so, according to the opinion.
Several times during the period, the price of stock fell, dropping to $73.18 per share at one point during the class period. The stock was $82.94 in February 2017
"The court considers all of the alleged facts in their totality and finds Pension Fund sufficiently pleaded loss causation," Kinkeade wrote. "It is plausible that over the course of the alleged partial corrective disclosures, the market became aware of Exxon Mobil’s alleged fraud and reacted each time with Exxon Mobil’s common stock falling. Pension Fund has properly pleaded loss causation."
Kinkeade wrote that while the plaintiff sufficiently pleaded several of its claims, it failed to meet the "heightened pleading standard for scienter" regarding Woodbury, which was way that claim against him was dismissed.
Dallas Division of the Northern District of Texas case number 3:16-cv-03111