Yukos Oil Company - Securities Class Action

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Copyright (c) 2001
Stanford Law School

Yukos Oil Company Conclusion: According to a press release dated October 25, 2006, a federal judge in Manhattan has dismissed an investor lawsuit against Yukos Oil Co. that alleged the Russian company concealed from the investing public the potential risk from its tax strategies and from the political activities of its top executive. In an opinion issued Wednesday, U.S. District Judge William H. Pauley III in Manhattan dismissed the investor lawsuit against Yukos, once Russia's largest oil company. In March, the judge allowed the claims over its tax strategies to proceed, but dismissed the other allegations.

In a press release dated April 3, 2006, a lawsuit filed in the United States accusing Russian oil major Yukos of violating securities laws by evading taxes was partly dismissed last week by a federal judge in New York, although several aspects of the lawsuit were allowed to proceed. Judge William Pauley dismissed claims brought against Group Menatep, the parent company of Yukos, by plaintiffs Roxwell Holdings Ltd. and Parsimony Ltd. However, he allowed claims against Yukos and the company's former chief financial officer, to proceed.

The original complaint charges Yukos, certain of its officers and directors and its accounting advisors with violations of the Securities Exchange Act of 1934. Yukos is one of Russia's leading vertically-integrated oil companies, and one of the world's largest non-state owned oil companies.

Specifically, the complaint alleges that defendants created a complex network of shell companies to evade taxes on the production, refining and sale of oil and oil products. These shell companies were registered in territories with preferential tax treatment to enable these companies to receive special tax exemptions in order to minimize Yukos' tax liability. Since these shell companies were not separate legal entities, as Yukos maintained control over the operations of these companies, Yukos was required to recognize the full amount of the receipts associated with these transactions for its own tax purposes and was not entitled to the preferential tax treatment these shell companies were granted. Accordingly, Yukos' tax liability was materially understated and its earnings were materially overstated in violation of GAAP.

Defendants' scheme began to unravel in October 2003 when the market learned that Russian authorities had arrested the Company's largest shareholder and CEO, defendant Mikhail Khodorkovsky, and had charged him with fraud, embezzlement and evading taxes on hundreds of millions of dollars that was owed to the government. At this time, the Russian authorities also announced that they would pursue criminal prosecutions against other senior Yukos officials. Ultimately, Yukos, which has been audited by the Tax Ministry of Russia for its fiscal year 2000 tax returns, will be required to pay approximately $3.3 billion for 2000 alone due to its understatement of its tax liability, including interest and penalties. The Tax Ministry intends to audit Yukos' books for 2001-2003 based upon the same charges. Yukos could ultimately be expected to pay upwards of $10 billion to the Tax Ministry for defendants' involvement in the illegal tax evasion scheme. As a result of the revelation of defendants' wrongdoing, investors have suffered massive damages as the price of Yukos' securities plummeted.

INDUSTRY CLASSIFICATION:
SIC Code:
Sector: Energy
Industry: Oil & Gas Operations

COMPANY/ISSUER NAME:	Yukos Oil Company
COMPANY/ISSUER TICKER:	YUKOF.PK
COMPANY WEBSITE:	http://www.yukos.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Roxwell Holdings Limited, et al. v. Yukos Oil Company, et al.

COURT: S.D. New York	DOCKET NUMBER: 04-CV-5243
JUDGE NAME: Hon. William H. Pauley III
DATE FILED: 07/02/2004	SOURCE: Business Wires
CLASS PERIOD START: 02/13/2003	CLASS PERIOD END: 10/25/2003
TYPE OF COMPLAINT: Unamended/Unconsolidated
PLAINTIFF FIRMS IN THIS OR SIMILAR CASE:
Brodsky & Smith, LLC 11 Bala Avenue, Suite 39, Bala Cynwyd, PA, 19004 (voice) 610.668.7987., (fax) 610.660.0450, esmith@Brodsky-Smith.com Glancy and Binkow 1801 Avenue of the Stars, suite 311, Los Angeles, CA, 90067 (voice) 310-201-9150, (fax) , info@glancylaw.com Law Offices of Charles J. Piven, P.A. World Trade Center-Baltimore,401 East Pratt Suite 2525, Baltimore, MD, 21202 (voice) 410.332.0030, (fax) , pivenlaw@erols.com Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville) 200 Broadhollow, Suite 406, Melville, NY, 11747 (voice) 631.367.7100, (fax) 631.367.1173, info@lerachlaw.com Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego) 401 B Street, Suite 1700, San Diego, CA, 92101 (voice) 206.749.5544, (fax) 206.749.9978, info@lerachlaw.com Murray, Frank & Sailer LLP 275 Madison Ave 34th Flr, New York, NY, 10016 (voice) 212.682.1818, (fax) 212.682.1892, email@murrayfrank.com Schatz & Nobel, P.C. 330 Main Street, Hartford, CT, 06106 (voice) 800.797.5499, (fax) 860.493.6290, sn06106@AOL.com Scott & Scott LLC P.O. Box 192, 108 Norwich Avenue, Colchester, CT, 06415 (voice) 860.537.5537, (fax) 860.537.4432, scottlaw@scott-scott.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 8

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint
Type: Complaint		Date on the document: 07/02/2004

REFERENCE COMPLAINT

In Re: Yukos Oil Company Securities Litigation

COURT: S.D. New York	DOCKET NUMBER: 04-CV-5243
JUDGE NAME: Hon. William H. Pauley III
DATE FILED: 03/09/2005	SOURCE: Business Wires
CLASS PERIOD START: 01/22/2003	CLASS PERIOD END: 10/25/2003
TYPE OF COMPLAINT: Consolidated and/or Amended
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville) 200 Broadhollow, Suite 406, Melville, NY, 11747 (voice) 631.367.7100, (fax) 631.367.1173, info@lerachlaw.com Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego) 401 B Street, Suite 1700, San Diego, CA, 92101 (voice) 206.749.5544, (fax) 206.749.9978, info@lerachlaw.com Murray, Frank & Sailer LLP 275 Madison Ave 34th Flr, New York, NY, 10016 (voice) 212.682.1818, (fax) 212.682.1892, email@murrayfrank.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 3

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Amended Complaint For Violations Of The Federal Securities Laws
Type: Complaint		Date on the document: 03/09/2005
U.S. District Court Civil Docket
Type: Docket		Date on the document: 10/27/2006

OTHER DOCUMENTS
Class Action Complaint - Jury Trial Demanded
Case Name and/or Number: Curtis V. Reinan, et al. v. Yukos Oil Company, et al.
Type: Complaint		Date on the document: 08/06/2004

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