Did ExxonMobil commit securities fraud by denying climate change?
New York's state attorney general and a US congressman are looking into whether聽the energy giant illegally misled shareholders about climate change.
New York's state attorney general and a US congressman are looking into whether聽the energy giant illegally misled shareholders about climate change.
New York state's attorney general,聽Eric Schneiderman,聽and US Rep.聽Ted Lieu (D) of California are both looking into whether聽the world鈥檚 largest publicly traded oil and gas company intentionally misled聽the public and company shareholders about its own knowledge of climate change and the inherent risks it posed to the oil industry.
The outcry started in September, when InsideClimate News published an investigation asserting that, since the 1970s, ExxonMobil,聽has known of fossil fuels' contribution to climate change. The company鈥檚 own scientists are said to have raised concerns that were contradicted by executives. Another inquiry published in the Los Angeles Times in October also exposed the gap between ExxonMobil鈥檚 public and private narratives over melting ice in the Arctic.
New York Attorney General Schneiderman聽launched his own probe last week. A New York state law called the Martin Act gives the Attorney General uniquely wide authority to prosecute securities fraud.
The New York Times reports that Mr. Schneiderman issued a subpoena for a trove of Exxon鈥檚 financial records, emails, and other related materials necessary for the Attorney General to prove the company deceived the public by misrepresenting, or omitting, a material fact in the offering of securities. The Attorney General's Office recently reached a deal with St. Louis-based聽Peabody Energy after investigating the firm for downplaying the risks climate change poses to the fossil fuel industry.
Schneiderman's investigation will focus on the company's funding of unaffiliated organizations that worked to undermine climate science while its own researchers presented risk speculation to Exxon executives.聽
In a similar vein Rep. Lieu is calling on the聽US Securities and Exchange Commission (SEC) to investigate.聽
In a letter to SEC Chair May Jo White, Congressman Ted Lieu of Los Angeles County asked Ms. White to explore whether Exxon Mobil broke any laws by misinforming or withholding material facts about climate change from shareholders:
Reuters reports the SEC has declined to comment on whether it will investigate Exxon鈥檚 climate change statements to shareholders. To claim federal securities fraud against the company, the SEC would need to prove intent or knowledge of wrongdoing, unlike in New York State, where no such grounds need to be established.
Exxon Mobil Corp. has denied all charges.
Kenneth Cohen, vice president of public and government affairs for the company, told the New York Times,聽鈥淲e unequivocally reject the allegations that Exxon Mobil has suppressed climate change research," and noted the company has funded and published mainstream climate research since the 1970's. Cohen also said Exxon disclosed climate risks to investors.