In June 2011 there was a significant oil spill in the shallow coastal Bohai Bay near the Korean Peninsula. The platforms and drilling rigs are operated by a joint venture of the China National Offshore Oil Corp. (CNOOC) and Conoco Philips - China.(康菲中国). Investigation of the facts was the subject of a study by China's State Oceanic Administration. When CNOOC downplayed the spill pension fund plaintiffs brought a securities fraud action. But they have been stymied because the Chinese agency's report was held insufficient to establish "scienter" - intent by CNOOC to mislead. Another win for the defense based on the rigors of the so-called Private Securities Litigation Reform Act and its onersous pleading requirements.
Fishermen in China have protested the inadequacy of the settlement - and one group has filed suit in federal court in Texas - a story told HERE. - gwc
theRacetotheBottom - Home - Bohai Oil Spills: CNOOC’s Motion to Dismiss Survives Second Circuit Scrutiny : "In Sinay v. CNOOC Ltd., No. 13‒2240, 2014 WL 350055 (2d Cir. Feb. 3 2014), the Second Circuit affirmed the district court’s dismissal of a putative class action for failure to plead scienter with particularity.
A putative class alleged that CNOOC Ltd. (Defendant) made false and fraudulent statements to investors relating to: (i) the safety of an oilfield it owned and developed with another oil producer and (ii) two major oil spills off the northeastern coast of China.
The class brought claims under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b‒5 of the Exchange Act. Prior to the oil spills, Defendant lauded its commitment to safety in multiple press statements. After the spills, Defendant reassured investors that it and its partner had the spills under control. At the trial-court level, Defendant moved to dismiss both claims. The district court granted the motion to dismiss, finding that the class had not adequately pleaded scienter."
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