Tue, 08/07/2014 - 06:18
Law firm Pomerantz is claiming in the United States District Court in Texas on behalf of UK investment funds who bought BP ordinary shares and American Depositary Shares (ADS) on the LSE before the 2010 Deepwater Horizon disaster.
The disaster led to BP’s share price crashing with invested funds collectively losing billions of dollars.
Previously, the US Supreme Court’s decision in Morrison v National Australia Bank Ltd (2010) meant that US federal securities law remedies were limited to securities purchased on US stock exchanges, excluding UK institutions who invested on the LSE.
However, Pomerantz’s success in the 2013 case of Alameda County Employees Retirement Association et al v BP plc, in which Pomerantz advised the claimants, saw the Texas court rule that it had jurisdiction for the case to proceed under English common law (for ordinary shares and ADS) and also under US federal securities laws (for ADS only).
The victory means that UK investment funds can bring claims under English common law in the Texas court in relation to ordinary shares purchased on the LSE. Pomerantz is litigating such claims as single actions alongside securities fraud claims related to any ADS losses.
English common law calls for individual rather than class action lawsuits, meaning that only those investors who have filed actions will receive a portion of any settlement or judgment. Pomerantz has already been instructed by a number of pension funds who suffered significant losses to file claims on their behalf, acting on a contingency basis which removes financial risk for the claimant.
The firm is leading the action under the direction of partner Jeremy Lieberman. The team was recently augmented by the hire of dual qualified US-UK lawyer Jennifer Pafiti who joined Pomerantz from another leading plaintiff class action law firm.
Pafiti says: “This is a hugely complex case and the outcome will have significant ramifications for securities litigation in the US. The fact that UK pension funds who bought stock on the LSE can now participate in bringing claims in the US raises the prospect of recoveries where significant losses have been incurred.”
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