According to the law firm press release, Exxon is a multinational oil and gas company and the world’s largest publicly traded company.
The complaint alleges that throughout the Class Period, Exxon repeatedly highlighted the strength of its business model and its transparency and reporting integrity, particularly with regard to its oil and gas reserves and the value of those reserves. Exxon’s public statements were materially false and misleading when made as they failed to disclose: (a) that Exxon’s own internally generated reports concerning climate change recognized the environmental risks caused by global warming and climate change; (b) that, given the risks associated with global warming and climate change, the Company would not be able to extract the existing hydrocarbon reserves Exxon claimed to have and, therefore, a material portion of Exxon’s reserves were stranded and should have been written down; and (c) that Exxon had employed an inaccurate “price of carbon” – the cost of regulations such as a carbon tax or a cap-and-trade system to push down emissions – in evaluating the value of certain of its future oil and gas prospects in order to keep the value of its reserves materially overstated. As a result of defendants’ positive Class Period statements, Exxon common stock traded at artificially inflated prices, reaching a Class Period high of more than $95 per share, and the rating agencies maintained Exxon’s AAA debt rating – the highest – permitting Exxon to sell $12 billion of corporate debt at extraordinarily favorable rates during the Class Period.
Through a series of partial disclosures issued by different news sources between mid-August 2016 and late September 2016, the market learned that federal regulators were actively scrutinizing Exxon’s reserve accounting related to climate change and global warming and its refusal to write down any of its oil and gas reserves in the face of declining global oil prices. On these disclosures, the price of Exxon common stock fell as low as $82.54 per share on September 20, 2016, down more than 13% from the stock’s Class Period high, erasing billions of dollars of market capitalization.
Then on October 28, 2016, before the open of trading, Exxon issued a release announcing its financial results for the quarter ended September 30, 2016. Exxon disclosed that it might be forced to write down nearly 20% of its oil and gas assets. Specifically, the Company acknowledged that it might have to write down 3.6 billion barrels of oil sand reserves and one billion barrels of other North American reserves that Exxon now conceded were not profitable to produce under current prices. In response to this news, the price of Exxon common stock fell more than $2 per share on October 28, 2016, on unusually high trading volume.
On May 3, 2017, the Court appointed Lead Plaintiffs and Counsel. Lead Plaintiff filed an amended Complaint on July 26, 2017. On September 26, Defendants filed a Motion to Dismiss the amended Complaint. On August 14, 2018, the Court issued an Order granting in part and denying in part Defendants' Motion to Dismiss.