Universities Superannuation Scheme, London, can pursue a class-action lawsuit against Petroleo Brasileiro SA-Petrobras.
The £48 billion ($68.4 billion) pension fund is acting as lead plaintiff on behalf of investors who allege securities fraud violations against the firm, “stemming from a large-scale bribery and money-laundering scheme that caused tens of billions of dollars in damages,” the pension fund said in a news release Wednesday.
Judge Jed Rakoff certified a class of investors who acquired Petrobras securities between Jan. 22, 2010, and July 28, 2015. USS was granted its motion for class certification in U.S. District Court in New York on Tuesday.
The time period for purchasers of securities covered by the class action was broadened by four months, to July 28. The acceptance of this extension “is important as it calls into question the accuracy of Petrobras' reported $2.5 billion impairment charge related to the fraudulent bribery scheme and illegal contract overpayments,” the news release said.
Petrobras opposed the extension, on the grounds that it was “unreasonable for investors to rely on earlier fraudulent financial statements.”
Mr. Rakoff wrote in his decision that, through this opposition to extension, Petrobras was in effect “arguing (rather remarkably) that its own estimate of $2.5 billion in losses was so outlandishly incorrect that the market and investors in its securities should have known better than to rely on it.”
Jeremy Hill, group general counsel at USS, said in the release: “The fraudulent actions of Petrobras executives have caused significant losses to investors worldwide, many of whom are responsible for the pensions or long-term savings of large numbers of individuals.”
Mr. Hill added: “As lead plaintiff, we therefore welcome the court's decision, which will allow these claims to continue as a class action.”
Pomerantz law firm is lead counsel for the class.