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New York state sues Exxon Mobil alleging deception over costs of climate-change regulations

New York state Attorney General Barbara D. Underwood filed a lawsuit against Exxon Mobil Corp., alleging the oil company deceived investors about its financial exposure to the increasing cost of regulations meant to mitigate climate change.

In the suit, which was filed Wednesday in New York State Supreme Court in New York County, Ms. Underwood alleges that while Exxon Mobil told investors it has accounted for governmental regulation of climate change by applying a proxy cost (a stand-in for the likely effects of expected future events) of carbon, she said the company has in reality applied much lower proxy costs or none at all.

"Investors put their money and their trust in Exxon — which assured them of the long-term value of their shares, as the company claimed to be factoring the risk of increasing climate change regulation into its business decisions. Yet as our investigation found, Exxon often did no such thing," Ms. Underwood said in a news release announcing the lawsuit. "Instead, Exxon built a facade to deceive investors into believing that the company was managing the risks of climate change regulation to its business when, in fact, it was intentionally and systematically underestimating or ignoring them, contrary to its public representations."

The lawsuit seeks an unspecified award of damages in the form of "disgorgement of all monies obtained in connection with the alleged fraud, and restitution," according to the news release, as well as the prohibition of the alleged practices and the requirement of a future correction to the practices.

In the news release, Ms. Underwood cited the $209.2 billion New York State Common Retirement Fund and $119.3 billion New York State Teachers' Retirement System, both based in Albany, as having a combined $1.5 billion invested with Exxon Mobil.

In a statement emailed by an Exxon Mobil spokesman, the company said: "These baseless allegations are a product of closed-door lobbying by special interests, political opportunism and the attorney general's inability to admit that a three-year investigation has uncovered no wrongdoing. The company looks forward to refuting these claims as soon as possible and getting this meritless civil lawsuit dismissed. There is no evidence to support these allegations, which come after a 2016 press conference by former New York Attorney General Eric Schneiderman, Al Gore and other Democrat attorneys general, a discredited media campaign and lobbying by anti-fossil-fuel activists."