Sounds like a big stretch to me. First, it assumes investors have not heard of climate change or the impact of CO2 on climate change. Second, it assumes that investors that were mislead lost significant money just because of this 'longstanding fraudulent scheme.' If Exxon told investors it had found the mother load of oil and would therefore be able to increase the value for investors, when in fact it hadn't, that would be fraudulent. Lastly, if we didn't have a planet over populated and losing it's rain forests, the level of CO2 would not have risen to dangerous levels. And if China were engaged in cutting their emission levels like most of the world, including the US, we would also not be in the shape we are in. I hope the judge throws this fraudulent case out before it costs tax payers and Exxon investors real money.
4
What a waste of time and resources by the Attorney General of NY to file this as the case has already been thrown out of court. For some reason all of our Attorney Generals seem to focus on issues outside of NY. She should focus on the many issues inside NY State, however, she like her predecessors seem to look for publicity rather than the problems here in NY State.
7
Thankfully, I am long gone from my NY roots. I am continuously amazed at the corrupt Democrat political machine, which smells from Albany to NYC. This lawsuit is just another in the many despicable episodes that makes me wonder where the voters are. The case for man made climate change is weak and there are many respected scientists who don't agree with the Democrats. Just google it, if you dare to learn the truth. Many boomers who have lost faith in the place they lived their whole lives are moving out of state, escaping high taxes, illegal immigration (see Farmingville) and horrendous political leadership.
5
Bless you, Empire State! Just for profit, these greedy guys put all of us at risk.
Oil companies have a history of deceiving. They told us all that leaded gas was not detrimental to human health or the environment. Imagine a Clair Cameron Patterson speaking to a blind, deaf congress today?
3
NYC- overcrowded, massive carbon footprint, unsustainable ecosystem, importing water and food. Breathtaking hypocrisy.
5
This is a baseless lawsuit ... it’s a publicity stunt and will get as far in court as a rolling a rock up hillside of molasses ... not a good use of public funds.
6
You might consider a case against your President since his claims are no different than Exon Mobil.
5
Exxon et al are only the pushers. You and I are the fossil fuel addicts.
6
The tobacco companies did the same denials about cigarettes and lung cancer. Profit over ethics often rules....often with tragic results for many.
3
Climate change is a false premise for regulating or taxing carbon dioxide emissions. Political or business leaders who advocate unwarranted taxes and regulations on fossil fuels will be seen as fools or knaves. Climate change is NOT caused by human fossil fuels use. There is no empirical evidence that fossil fuels use affects climate. Earth naturally recycles all carbon dioxide.
Fossil fuels emit only 3% of total CO2 emissions. All the ambient CO2 in the atmosphere is promptly converted in the oceans to calcite (limestone) and other carbonates, mostly through biological paths. CO2 + CaO => CaCO3. 99.84% of all carbon on earth is already sequestered as sediments in earth's crust. The lithosphere is a massive hungry carbon sink that converts ambient CO2 to carbonate almost as soon as it is emitted.
The Paris Treaty is now estimated to cost up to to $100 trillion -- $13,333 per human being. Nearly two-thirds of humanity's cumulative savings over history. And will not affect climate at all. A modern coal power plant emits few air effluents except water vapor and carbon dioxide. Coal remains the lowest cost and most reliable source of electric energy, along with natural gas.
Coal & gas dominate electric energy generation because they are cheap and reliable. Without the CO2-driven global-warming boogeyman, wind and solar power will be relegated to the niches they deserve. Using renewable energy is like paying first-class airfare to fly standby.
3
Disappointing to see uncritical citation of the 2015 ICN and LA Times articles here; read these carefully and one finds they're grossly misleading, repeatedly quoting Exxon "internal documents" out of context to build the false #exxonknew narrative used to justify this flurry of attacks. Follow the money and one also finds they were funded by anti-oil activists including the Rockefeller fund - also unmentioned here - clearly creating a conflict of interest, though this connection was concealed at the time of publication.
4
I don’t understand. If I bought Exxon shares in 1982, today my investment would be worth twenty times what I paid. How does this lawsuit - which alleges a fraud on investors - protect my interests? Are you saying I should sell today because Exxon’s misleading statements overvalue the share price, which reflects future earnings that will plummet because of climate change? Huh? I get the scapegoating and deep pockets part of it. But the investor fraud part of it, which is what it is, seems a stretch.
4
Good luck with this one, NY. The dinosaurs will return to Earth before the state collects. SCOTUS will take care of that down the road. I can hear the lawyers laughing as they contemplate billable hours. Gonna get me a Bentley! Of course Exxon's guilty, by the way, but that's of little consequence compared to the stock price and portfolio value.
1
ExxonMobil challenged the NY AG's "tainted, meritless investigation" as built on "baseless allegations"? Carbon, cash & climate. Hmm.
I wonder what their priorities may have been. Or what they were telling their stockholders.
Oh, wait a minute, this is an easy one... Yup, even on the surface, to a novice like me.
Sue them!
2
This is simply another money making scheme for politicians and plaintiff attorneys following in the mold of bleeding big tobacco. Demonize the evil corporations for selling their products but never blame the end user. Hey New Yorkers, is global warming the fault of Mobil-Exxon or your 90 minute each way daily commutes?
6
Will Ms. Underwood be suing the drivers of carbon-powered motor vehicles next? After all, there is no emission of CO2 until the carbon-based fuel is burned, and all of us drivers know full well that our activity is contributing to global warming.
6
So let me see if I understand this. The AG is suing Exxon on behalf of the shareholders. The suit will cause Exxon to pay fines in the range of hundreds of millions of dollars. The cost of which will in the end fall mainly on the shareholders. Shareholders end up paying a fine because they themselves were defrauded.
7
With all the research oil companies have done, why didn't they invest their immense wealth in renewables? They could have devised a tapering off plan that would have cushioned the blow of the transfer. Long-term planning really isn't capitalism's forte. It has to be nurtured by responsible government.
9
@Madame Defarge
I think you are misinformed as to how capitalism is supposed to, and does, work. Capitalism does not mean that every currently successful corporate entity thrives over long periods of time, through all the changes that seem to happen at the speed of light, though some manage to. Capitalism means that economic actors constantly strive to provide goods and services at a price that provides value to potential customers and providers of capital direct said capital to those opportunities perceived to provide the best future returns. That seemingly chaotic process actually is very efficient.
In this specific case, if renewable energy is an attractive opportunity, Exxon Mobil might pursue it, but it is just as likely that a disruptive company will be the one to successfully capture the opportunity. Either outcome is fine under capitalism and there is no real need for "nurturing". Nurturing by government runs the risk of creating monopolies that do not serve the public well.
5
They already do research in renewables- the algae and some other stuff.
2
Finally, prosecutors are recognizing the true cost of: ENVIRONMENTAL EXTERNALITIES.
Now that the U.S. Supreme Court ruled corporations are people in their CITIZENS UNITED ruling; corporations have a choice: clean up after themselves -or- be PROSECUTED!
5
This is the way to stop fossil fuel use. These companies need to be sued until it hurts. Bravo to New York for doing this. And yes, Exxon certainly is a leader in global warming.
8
If you are a U.S. citizen, you are liable to pay taxes on all of your worldwide income. This can be a huge burden. However, there is a way to minimize the amount of tax you legally have to pay as a U.S. citizen: move to Puerto Rico. The Long Reach
2
Our hands in your pockets. Exxon Mobil has deep pockets, indeed. Not a bad gamble, maybe get a bunch of dough and definitely lots of publicity, Ms. Underwood for Governor, Ms. Underwood for President.
4
I have to say that I think the U.s goes overboard with frivolous lawsuits and very often when I see a headline that has the word "sue" in it, i think, "here we go, again." But this doesn't appear to be the case, here.
I remember years ago watching C-Span where virtually all the cigarette company CEO's got up and lied through their teeth about the health effects of smoking, which had been known for years. It opened my eyes as how how most big businesses operate. The dollar is the bottom line, health and welfare be damned.
This isn't nearly what I'd like to see in terms of corporations - especially those most responsible for destroying our planet - accountable, but it's a start in the right direction.
Good for Ms. Underwood. After the Kavanaugh hearings, if you can call them that, I had written her off as jut another toady.
9
@Manuela
Exactly what had Ms. Underwood to do with the Kavanaugh hearings?
The real problem is we do not have a system where the costs products confer on society is properly assess to their makers.
Any leader at a hydrocarbon producer that claims they weren't knowledgeable about the effects their products have had on the environment whether it be overloading of carbon in the atmosphere or acidification of the Oceans are lying to themselves, and the public. They will face the liability of endangering future generations of life. Their funding of lobbying effort to prevent the adoption of non-fossil fuel alternatives will prove to be nothing short of genocide for profits.
1000 square miles of solar panels can supply the power requirements of the USA, that is 100 miles x 100 miles. Imagine a hundred 10 mile x 10 mile solar farms scattered across the vast high solar regions of our country.
Exxon you want to save yourself and the small towns, and rural regions of our Country build low pollution alternative energy facilities in these economically challenged areas.
13
@Stephan
Sadly Stephen our entire government is so corrupted I'd actually be surprised if ANY Corporation paid. It really has me down about the direction in our Government and overall leadership. If you can't trust your own leader who can you trust?
@Stephan Your post is SPOT ON! Ray REECE, author of the must read: "THE SUN BETRAYED" detailed all of this in the late '70's.
This is one reason I now hold only mutual funds. I'm sure some of them have oil company stock and debt, but I'm hoping they will recognize the dangers and modify holdings before I am damaged much.
Climate change will affect virtually *every* business in some way or another. But oil and gas companies are particularly vulnerable because eventually fossil fuels must be phased out in favor of renewables. If that doesn't happen, the world will be damaged to the point that they will be irrelevant anyway.
13
@Barbara
You can also invest in a few mutual funds that have not fossil fuel holdings, as well as several that are "socially conscious" investments.
1
@Barbara
There are many good reasons to hold mutual funds, and there are some conscientious ones that deliberately eliminate carbon energy company stocks from their holdings.
But if you believe, and I think correctly, that climate change will affect virtually every business, why not just select renewable energy firms instead of holding mutual funds and hoping they will recognize the dangers and divest from carbon fuel companies?
We have 12 years to get off of fossil fuels. That is it. Our kids and grandkids are going to regret the day they were born if adults don't get a hold of this issue. We need more adults in our gov't who understand the issue and are willing to do what is necessary and tell these corrupt clowns to get the hell out of the way. Maybe this lawsuit will be the start of many that pave the way for necessary change in the way we get energy, the way we farm, the way we eat, the way we live and the way we treat each other. We have lost so much time due to our corrupt gov't. Vote!
13
While true stockholder fraud prevails around us the NY AG's office is tilting at windmills with nuisance suits like this? This is not only a gross waste of taxpayer funds it is a prime example of how our government has been waging war on corporate America. I only hope that Exxon prevails in forcing the State of New York reimburse it for the cost of this frivolous endeavor.
While state oil companies in Venezuela, Saudi Arabia, China, Indonesia, Kazakhstan, Angola spoil our environment with unsafe practices big oil produces oil at a much higher standard of environmental care. Oh yes, its nasty business but so long as we insist on driving and lighting our homes we'll need oil and we should be begging them to produce it for us!
10
@REX DUNN We taught the World how to consume oil, isn't time we taught the World a new path for energy production before it poisons us?
10
@Stephan
We lead the world in safe hydrocarbon production practices. I hope that we can lead the world in alternative energy generation and energy efficient technologies.
I just hate that our politicians are all about blaming one another rather than solutions to our energy generation & consumption issues.
In my house I have LED lighting throughout, on demand hot water, solar panels and our thermostat is never above 68f. We are also trying to consume less in general. I know we can a lot more.
What a waste. If the shareholders have a problem they file a lawsuit themselves.
8
The states will be all over this, they need the revenue
3
@Tim Rutledge sadly you have probably hit the real reason NY's AG is going down this path.
1
I own some of this stock and this idiotic action is against my interests. Climate change in the reasonable number of years I might own this stock is nothing. In fact they own a lot of natural gas production in the US which is going to grow. Please but out of my investments, but they won't listen.
3
vulcanalex....enjoy the baking of planet Earth and the toxic fracking wells from sea to rising sea.
Greed Over Planet 2018
No foresight and wisdom need apply.
Sad.....and fatal.
14
The problem is not Exxon. The problem is the system itself, where a corporate does not have to care about anything except the few and weak environmental restrictions. Why should Exxon deal with climate change more than they need because of their own image? Exxon's goal is not to save our planet, but to make profit.
The government has to induce a responsibility. Maybe with severe restrictions. Maybe with a tax bonus for "good" companies.
But if we wait for corporates to mend their ways, we will not be able to stop climate change.
10
This is all part of thre Aug 5 2108 NYTimes Magazine "30 Years We Could Have saved the planet" EVERY BODY KNEW. Its been news since the 1970's, Since Rafe Pomereance, since the Jim Hansen, thats why I am now an #earthlobbyist. This all makes me so sad and angry for everybody who will live in the future. Carbon Charges and Carbon Dividends are the way to go. Conservation and Efficiency is the path out of this Big Fossil nightmare Spring 1979 - The first suggestion to Rafe Pomerance, the first #earthlobbyist, that humankind was destroying the conditions necessary for its own survival came on Page 66 of the government publication EPA-600/7-78-019. It was a technical report about coal, bound in a coal-black cover with beige lettering. See it here by searching 600778019 at https://nepis.epa.gov/
9
@David #4015Days Since the "planet" will be fine, it needs no "saving". Now some over populated areas might get a correction.
@David #4015Days: they knew since the 1950s!
2
Such foolishness. I live at the coast. The ocean rise is measured in millimeters, while the tide changes >3 meters every single day, twice a day. The emperor has no clothes.
4
Take it to the supreme court & see who the deciding vote in a 5 to 4 decision.......... the Honorable Brett Kavanaugh the corporate SHILL himself , MISSION ACCOMPLISHED.
3
So New York says the stockholders of Exxon were victims and sets out to sue them. Seems like they are being victimized twice, once by Exxon and once by Cuomo. Cuomo wants the state to punish Exxon for deceiving shareholders by reducing the price of Exxon stock and curtailing dividends. Seems like Cuomo is more fraudulent than Exxon.
8
Why not spend money to help improve NY roads and schools instead?
5
"Scott J. Silvestri, an Exxon Mobil spokesman, said Wednesday that the New York attorney general’s office had 'doubled down on its tainted, meritless investigation by filing a complaint against ExxonMobil'.”
Ah, the Trump of Exxon. And some fools actually thought Tillerson was the "adult" in the room.
4
Fossil fuel companies will pay the price of their big lie just as the tobacco companies did, only it will be magnitudes higher. How do I know this? Simple. Someone is going to have to pay the cost for the property destruction caused by climate change. That is a given fact. Once that entity (Government, business, whatever) is on the hook for that cost, they will sue to recover their cost. The evidence of fossil fuel causing climate change is indisputable, but more so, the trail of internal documents contained in the fossil fuel companies archives will show that they knew all along that their product was, and is, the cause of climate change. Their scientists are not stupid, just corrupt, so the evidence is there and eventually will come out just like in the case of the tobacco companies.
10
And the general public wonders why companies don't want to IPO...
4
Guys, guys!
I think you're forgetting who just got put on the Supreme Court. Does anyone really think the Frightful Five (Clarence Thomas, Samuel Alito, John Roberts, Neil Gorsuch, and Brett Kavanaugh) would hesitate to overturn any decision holding Exxon Mobil (or any other fossil fuel company) responsible for defrauding shareholders vis-a-vis the risks of climate change?
(The fact that the suit is based on state law grounds doesn't mean SCOTUS would lack jurisdiction under one or more sections of the Constitution to hear an appeal from the New York State Court of Appeals.)
4
You have to be joking. Folks are living jn denial regarding the benefits they realized in our petroleum based economy.
Will restaurants serving beef be sued next? Will NYT restaurant praising a restaurant's steak offerings be indicted as co-conspirators?
12
So, let's see if I'm following this.
For over 50 years scientists at Mobil have expressed concern on many occasions that burning fossil fuels might be contributing to climate change but corporate management correctly predicted that regulators would not take action in ways that would diminish the value of the company, thereby committing fraud by being right.
This lawsuit is right out of Atlas Shrugged.
1
Actually you weren't following. "Scientists" at Exxon Mobil never expressed the concern that you mentioned. "Burning" trivial amounts of fossil fuel has not, will not and can not contribute to CLIMATE CHANGE.
2
@bob Trivial? triv·i·al
/ˈtrivēəl/adjective
of little value or importance.
Are we talking about the same word here? "Burning" fossil fuels energize the whole world. "...According to the U.S. Geological Survey (USGS), the world's volcanoes, both on land and undersea, generate about 200 million tons of carbon dioxide (CO2) annually, while our automotive and industrial activities cause some 24 billion tons of CO2 emissions every year worldwide." If this this is trivial then the geological activity of the solar system's most geologically active planet must be minuscule. I can understand an argument where someone cites the complexity of the climate system to underscore the futility of our analysis... but marginalizing our fossil fuel use as trivial is beyond intellectually lazy/malicious.
1
@GPC It is not fraud, they believed correctly that no matter what regulations might happen it would not materially effect the value of their company. That is a very logical basis and as an investor I decide what might impact my investments for myself, I don't need the NY government involved wasting my money defending idiotic law suits.
1
While I applaud this lawsuit, had the oil companies back in the 60’s and 70’s bought front page advertising declaring, “The burning of fossil fuels is likely to destroy the atmosphere and in fifty years we will see an unalterable changing of the environment that will make human life impossible.” I doubt we would have stopped using fossil fuels. The recovery, refining and burning of petroleum is what allows for our modern economy, wealth, population growth and a myriad number of other perceived benefits. Like the heroin addict once the consumer got hooked on gasoline and plastics there was no going back.
3
@Andrew And that would have been a lie. You think in 20 more years much will change in the US? I don't.
Thanks goodness for California and New York tackling climate change. The US would be an unmitigated disgrace with regard to climate change were it not for these (blue) States.
19
I LOVE this woman. Quiet, determined, patient. She may save us.
23
Bravo Ms. Underwood for this bold move!
19
Corporate-owned commercial TV, which now occupies probably 95% of America's collective mind, is now a clear and present danger to our nation's consciousness. TV watchers subconsciously believe that they can switch the world's perilous condition as easy as reaching for their remote control.
The gods are laughing and the other 5% of Americans are preparing for the worst.
7
@Dave Morgan I think you mean Putin is laughing right?
Exxon is merely the foremost example of a corporation that should be nationalized, its directors and executives imprisoned, and its shareholders left holding the bag.
12
Because government run oil companies have worked so well in Venezuela.
7
@Rocky L. R.
Alaska still hasn't fully recovered from the Exxon Valdez spill and unfortunately courts blocked many victims from ever getting recompense from the huge damage they suffered.
The author conveniently failed to mention that earlier this summer, a U.S judge dismissed a lawsuit by New York City seeking to hold major oil companies liable for climate change by carbon emissions from burning fossil fuels.
Is there a reason John Schwartz is hiding a material event that should have been mentioned in this article. Misleading reporting.
Attorney General Barbara Underwood is making a costly mistake with her politically motivated lawsuit.
21
Read the article again. The lawsuit has nothing to do with exacerbating climate change, but with defrauding investors by failing to disclose risks.
11
@Gusting when there are NO risks, what should be disclosed old sport. Perhaps the Catholic church should also bring a lawsuit because Exxon Mobil didn't disclose that if shareholders didn't lead a moral and just life, they would go to hell.
@JMS -- Hi, I'm John. That fact is in the story. Sorry you didn't see it.
17
Please help us understand what is the "mid-2000s" you refer to repeatedly - and clarify the meaning of the sentences that contain this confusing term.
1
We are all free to stop using petroleum products at any time to punish these companies. The fact that we blame our drug dealer oil companies for supplying us with our drug of choice is the height of hypocrisy. The u.s. has 3% of the worlds oil supply but uses 25% of it. Explain how we are victims in this?
5
@AlBecause we have created a society that requires mobility and the ability to utilize products produced with petroleum. We do not produce the items and we have no power as individual citizens to influence major societal change. We are kept too busy living a hand to mouth existence, constantly in fear of losing our income and thus becoming homeless to spend time making the changes that would need to occur to have a real impact. Most of us cannot afford an electric vehicle. Even hybrid models are significantly more expensive and only available to those who have enough $$ to put more up front and get it back in a tax credit. Not to mention all of the plastics that are unavoidable for everyday existence unless one wishes to live the life of an ascetic, and even there one might encounter a good amount of plastic. IT is just not realistic to place the responsibility for major societal and economic changes onto the shoulders of individuals. We have little power to influence this. Those plastic straws you stopped using don't even make a dent.
2
@Al Hi Al, airplanes are the biggest enemies of the planet 6000 lbs CO2 round trip coast to coast per person on a 767
No, we aren’t free to stop using petroleum products. From gas for transportation to fuel for heating to the containers our food is packaged in to the fertilizer that helps produce our food to the fabrics that clothe us to the building materials that our houses, apartments, and workplaces are made of, petroleum is as much a part of our lives as air.
4
Wow. What a great use of taxpayer money. Let’s see how long it takes for this to get tossed out of court.
6
@JW Not only that, if these AGs do succeed in getting XOM to pay some piddling amount to shareholders, it will only decrease the per share price of the stock held by those same shareholders, with the likelihood of a net loss. Thanks for nothing!
2
This deceit is the greatest crime in the history of humankind, if you consider the number of victims, present and future.
When your industry engages in a “longstanding fraudulent scheme” to cover up the fact that it is playing a major part in heating the planet at a rate that will soon make it impossible to live here, what punishment is appropriate?
I have two sons in their early twenties. How would their futures be different if Exxon Mobil had come clean with the risks when they were first discovered? If the leader of the free world had shown leadership in time to save this planet for future generations?
What does it mean to find ourselves with a curtain in our hand, as we slowly draw it across it across the surface of the planet? Sound dire? Please read the peer-reviewed science.
And then vote.
27
So, in essence, New York has launched a lawsuit for money on behalf of securities investors who themselves have not expressed any grievances.
11
Another NY Attorney General pandering to what she hopes will be a voter base as she reaches for higher political office. You'd think that NY tax payers would be getting weary of having to fund this silliness as one after another state attorney general seeks to build some street cred among the liberal electorate at their expense.
6
You know nothing. AG Underwood is acting AG only, she is not running for AG office or any other office. The benefit of this lawsuit would go to the investor class. You know, rich republicans.
2
Exxon knew, before almost anyone else. They were certain of it by the mid 70's. They were going to lead in the area of global warming mitigation - their science was quite good - but in the early 80's the leadership decided to pivot to a denial stance. They've been lying since, either outright or by omission.
That move may have single-handedly doomed the human race. Good on the NY AG for going after them, inasmuch as it matters now. They could take all of ExxonMobil's worth and put it toward global warming mitigation but it still wouldn't come close to the damage they've done.
30
@Jeff The mid 70's saw the earth succumbing to a period of frozen landscapes not warming.
1
Flawed legal strategy - ignores climate impacts and any damages are converted into investor proceeds.
Instead, Damages should be based on climate change impacts - monetize this damage via multiplying the Social Cost off Carbon times Exxon's cumulative lifetime carbon emissions.
Force bankruptcy and liquidate the assets. Use the proceeds to develop renewable energy.
3
Finally.
Exxon and other oil companies are not in business to make the world a better place. After hiding the truth of the effects of atmospheric carbon dioxide for decades, Exxon and other oil companies now back a carbon tax. Why the change? Because the congressional bill they’ve been lobbying for exempts them from liability for the consequences of increased levels of atmospheric carbon dioxide. Their game hasn’t changed. They’ve profited. And now they should pay back what they owe society, with penalties.
31
Has anyone with a measurable IQ ever thought for even a second that a company would work to obviate its existence? Imagine if Exxon had stopped paying its PR department to make feel-good ads about how much they cared about the environment and used that money to fund CO2 capture projects. Their entire business model depends on burning every last drop of oil, unless they find a way to charge people for sunlight before then.
6
That’s one way of looking at it. The other way is that the image ads fossil fuel companies produce are actually designed to convince the public that they’re seeking new business models that go “beyond petroleum.” In fact, “beyond petroleum” was the pretend name BP came up with for itself in its image ads before the Deepwater Horizon disaster turned it into an unspeakable joke.
1
Ah, yes. Back to basics for the fossil fuel industry. When in doubt, use the First Amendment.
Didn't Citizens United use precisely this amendment to corrupt the political system in the USA? There are substantial fossil fuel industry fingerprints all over that particular effort also. As well as the changes this particular administration took upon themselves to implement in order to hide the funding of propaganda organisation working under the "philanthropy" umbrella.
If you are a philanthropist you should be proud of it and wear it as a badge, should you feel the need to hide the origin of your donations, then you are not involved in philanthropy.
It's also worth pointing out that companies are not citizens, are they to be covered under the First Amendment as a single entity speaking with one voice? They represent the funds and efforts of many but do they truly represent the individual moral voices of all those people who's work these companies profit from? I doubt it very much.
These giant entities tend to represent the voices of a very few at the expense of many, exactly what the First Amendment was designed to protect against.
10
@David Jones
Beautifully and cogently written, David.
2
I can't say for sure, but this sounds frivolous.
We definitely need our elected officials to come to the table to enact curbs on emissions. But it's a complicated world and the regulations will need to be well thought out and tailored to be fair and effective.
But a securities fraud lawsuit? Alleging a failure to disclose the risk of future legal regulation that could harm the energy business?
That sounds like about the least effective way to curb greenhouse gas emissions I could imagine. Sounds more like a political PR stunt.
What is the limiting principle on regulating disclosure about predictions of future, uncertain legislation? Can I sue Coca-Cola if a state decides to slap a soda tax on Coke in some future period?
Personally, I think it will be huge uphill battle to prove that predictions about uncertain, non-imminent legislation are fraudulent.
First of all, how are the statements even false--what climate change regulations have been enacted that Exxon said otherwise? And so what harm has even been suffered by investors--Exxon's stock is trading at a historically high PE ratio.
And where is the reliance? What reasonable investor was actually tricked into thinking that Exxon's business is not subject to regulatory risk? Exxon disclosed the risk of environmental regulations as a risk factor in its securities filings. And every reasonable investor (indeed every person) is on notice that climate change is a real problem that could upend the world.
9
@Mmm
Come down out of your hyper-rational ivory tower. You and everyone else is standing on a dying planet...or at least a planet that will no longer support human life. We're living a Sci-Fi movie but thinking that it'll end nicely. It won't. And you can't change the channel....
9
@Mmm Some uphill battles are worth fighting. Especially when there is no other choice, and no other option. Congress will do nothing, has done nothing. Maybe New York can.
4
Instead of Coca-Cola, I’ve got a better analogy for you. Say you’re the senior management at Philip-Morris and your scientists tell you that yes, there’s a causal link between smoking and cancer and emphysema. That news sounds bad for business, so predictably enough you lie for years to the public and to your shareholders that there’s any connection at all. Finally your scientists’ findings are leaked and you find yourself on the losing end of a massive class-action lawsuit brought by cancer and emphysema patients who used your product. If you’re a Philip-Morris shareholder, I’m guessing you’re not thrilled to see your share price tank (and your dividend cut) by the resulting bad publicity and multimillion dollar payout. In this case, if you substitute climate change for cancer Exxon Mobil seems to have done something similar.
1
Exxon has engaged in securities fraud by publicly making statements and financial projections for the purpose of boosting its stock valuation despite Exxon's awareness of their inconsistency with its internal assessments of the risks to its future business due to climate disruption. Exxon is at risk of holding stranded assets, for example, if/when regulatory imposition of transition from dependence on fossil fuels requires that "proven reserves" remain in the ground.
Congratulations and thanks to AG Underwood and her associates for bringing Exxon to account.
42
Exxon's major assets consist of the oil and gas reserves it holds. These assets are part of what gives the company its market value. If those assets cannot be extracted and sold, they become stranded assets, which are essentially useless.
It was in Exxon's corporate interests to prevent those assets from losing value.
They actively funded so-called think tanks which worked to undermine well documented scientific findings, some of which were Exxon's and did so for decades. They even took out full page ads in the NY Times describing the "uncertainties".
Was Exxon engaging in deception?" You betcha.
Exxon is being called to account and it is about time.
29
@Andy You nailed it. These companies carry huge assets as leased or owned reserves. The balance sheet would take quite a hit if those assets became valueless.
1
Exxon has a 60 year record of internal climate change acknowledgement and external climate denialism, secrecy and investor fraud.
1957
Scientists working at Humble Oil (now ExxonMobil) publish a paper on the dilution of carbon dioxide in the atmosphere and ocean. The paper notes: “Although appreciable amounts of carbon dioxide have undoubtedly been added from soils by tilling of land, apparently a much greater amount has resulted from the combustion of fossil fuels”–indicating company scientists understood the link between fossil fuel use and rising CO2.
1968
In a report produced for the American Petroleum Institute, scientists Elmer Robinson and R.C. Robbins note that, among the possible sources of rising CO2 in the atmosphere, “none seems to fit the presently observed situation as well as the fossil fuel emanation theory.” The paper warns that significant rises in CO2 could melt icecaps, increase sea levels, change fish distributions and increase plant photosynthesis.
1978
James Black of Exxon’s Products Research Division, writes an internal briefing paper called “The Greenhouse Effect” following from a 1977 presentation to Exxon’s management committee. The paper warns that human-caused emissions could raise global temperatures and result in serious consequences. “Present thinking holds that man has a time window of five to ten years before the need for hard decisions regarding changes in energy strategies might become critical”
Greed Over Planet demands duplicity.
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Good for the AG, and good for New York!
Corporations, not only Exxon Mobil, have been paying shady outfits to come up with fake research to justify their destructive business practices. Then, they turned around and paid hundreds of millions of dollars each year to lobby the government to put in place regulations and policies that favor them.
That was until Trump. Since then, we've had Scott Pruitt and his successor, both of whom are industry shills and relentlessly rolled back regulations that favor the oil and chemicals industries, to the detriment of the health of this nation's citizens, even allowing back higher levels of asbestos in products.
These people are greedy to the point of evil. Until voters reclaim their government, the only way to stop them is if all state attorneys general file lawsuits.
On November 6, vote blue!
--
'Things Trump Did While You Weren’t Looking' https://wp.me/p2KJ3H-2ZW
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@Rima
You do realize that this law suit has nothing to do with science or climate change? NYS is claiming that Exxon had an internal opinion about the worst case scenario of governments passing regulations with respect to global warming that they tested their investment decisions against that was more damaging to Exxon than what they communicated to investors as their opinion of the likely scenarios.
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@ebmem
Yes. I do. Presumably, the misimpressions given to investors come with a deceitful paper trail.
My comment was more general about the way the corporate world has used think tanks and lobbyists to get their way through money in politics and the different world we live in since the advent of Trump.
To quote former Fed Chair, Paul Volcker: “There is no force on earth that can stand up effectively, year after year, against the thousands of individuals and hundreds of millions of dollars in the Washington swamp aimed at influencing the legislative and electoral process,”
This is what's at the heart of the issue and one of the few way to effectively combat it, is by doing what the NY AG is doing, industry by industry, and not settling those cases as some AGs have.
Of course Exxon and other oil companies engaged in fraud to downplay the risks of climate change, risks they knew well for a very long time. This is not news. This is exactly like the risks of smoking that tobacco corporations kept under wraps. In both cases, they not only defrauded shareholders, they engaged in practices that endangered people's lives. Except in the case of Exxon, it's all our lives.
Like Big Tobacco, the only way companies like Exxon will change is through massive litigation and crippling penalties. And this has to start at the state level, as it's clear this current administration will not only do nothing, they will continue to support lies about the dangers of climate change. I hope other states Attorneys General will follow suit.
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@jrinsc The comparison to Big Tobacco is absurd. We can do without tobacco. We can't do without fossil fuel.
3
@Texas Liberal Both are addictions. And we'll have to learn to do without oil—and coal and gas—if we're to live in a sustainable way. It's not just the lives of humans are at stake; it's the big biological picture. The effects on the economy one way or another will be over in a century. The effects on life on earth are for all time.
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@jrinsc
Thank you. Clear analysis was never more strategically justified...
Mr. Schwarz is confused about several things. He says that "Exxon Mobil stopped funding groups that directly challenged the science of climate change in the mid-2000s" -- a date that is still in the future.
He supports the ridiculous claims of shareholder feaud while saying:
Exxon accepts the science of climate change and that it supports the Paris agreement. Exxon carried out much climate change research and published it in the scientific journals. Despite 40 years of climate hysteria, Exxon is strong and growing.
Where's the fraud?
The fraud is in secret meetings between the NY AG and climate activist lobbyists -- LA Jollo, Harvard, etc. -- in which green raised money to support suits by various State AGs. NY Times "Public Campaign Against Exxon Has Roots in a 2012 Meeting" https://www.nytimes.com/2016/05/24/science/public-campaign-against-exxon....
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@Kip Hansen “mid 2000’s” means 2000-2010
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@Kip Hansen
By "mid-2000s", Schwartz is referring to the decade of the mid-2000s -- between 2000-2010. In the preceding sentence, the author wrote, "the company was well aware of the risks ... even as it funded groups from the 1990s to the mid-2000s that denied serious climate risks", which is referring to those past decades, as well as the timing of the fraud.
It's good that Exxon Mobile ostensibly changed its practices in the last ten years, but that does not negate its previous (alleged) fraud, when it misrepresented it's projections/predictions of future assets.
The "secret meetings" you refer to is merely a red herring argument; aside from a meritless implication of bribery of the AG, there is nothing illicit in supporting the investigation of a corporation that's defrauding its investors.
2
@Kip Hansen
It seems you are the person confused about things.
Are you contending that Exxon Mobile has not stopped funding groups challenging the science of climate change?
Or do you not realize that the mid-2000s refers to a date somewhere in the middle of the range 2000 through 2010?
Environmental groups do not fund lawsuits brought by State AGs so your last paragraph is patently absurd. Some such groups do fund lawsuits brought by those groups, a fact for which I am very glad.
This is an attempt to turn a disagreement about business risks into a civil fraud case in the hope of extracting a large sum from a rich corporation. Risks posed by possible future regulations (or competition, or technological change, or changing fashions and culture, or anything else that might affect a business) are impossible to assess objectively. Investors are capable of recognizing boiler-plate reassurances for what they are, and making their own independent assessments. Exxon wasn't marketing an IPO to unsophisticated investors, or engaging in an initial coin offering.
It is not in the public interest to make every business disagreement or disappointment actionable.
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@Jonathan Katz . re: disagreement about business risks
Of course, its the courts that can determine if this is fraud or merely (short term) business decisions. A lawsuit is a legitimate ways to sort all this out.
Though, personally, this seems a lot like the tobacco company arguments. Generally, there is agreement that smoking is bad for your health and that burning fossil fuels is contributing to climate change. The vast majority of people/scientists/educators feel that believe smoking is not a health hazard or that fossil fuels consumption contributes negatively to the global rise in temperature.
Denying either issue (smoking and health / fossil fuels and climate change) seems petty and juvenile these days.
1
@Duckpuddle ==> The NY State AG suit is about securities fraud -- and has nothing to do with the reality of climate change. (and certainly nothing to do with tobacco.)
1
@Jonathan Katz:
I think climate change is the biggest and most dangerous issue this country faces, and it highlights the most egregious embarrassment and legacy of stupidity for which the Republican Party must answer. They elect fools and con men, to mislead the naive and to help their fossil fuel industry contributors. It's an absolute disgrace.
Having said that, I agree that this lawsuit seems misguided. For-profit companies will seek to benefit their shareholders; that is their mission. Shareholders know that corporate reports are crafted to be bland, upbeat, and are often intended to misdirect attention from less-salubrious facts. While smart companies should know that battling climate change is essential for their long-term viability, this common sense and dedication cannot be forced upon them in a courtroom.
Plus, we will want and need companies like Exxon and the insurance industry to be truly committed to working with us; not compelled by litigation to resist. A strong multinational corporation MUST believe in facts, even if the Republican Party does not. Those companies will join us; most insurance companies already have. Let's inspire well-minded people (i.e., everyone other than the current Republican Party) to join us in this existential cause - and not fragment ourselves and our efforts into more petty and divisive pursuits.
1
Barbara Underwood is using her time as AG of NY to bring major suits with major consequences on many issues. Without the need for politics, she can concentrate fully on the job to be done and do it. Bravo!
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@pag
This prosecution is a waste of taxpayer funds, will not resolve anything, as is based on her hope pf political advantage. It is unfortunate that when she loses it, Exxon will not be entitled to charge her for their costs in defending themselves against a claim that has no basis in law.
The NYS citizens who are the victims of actual crimes would be better served if she investigated the political corruption. The Democrat and Republican leadership of the NYS legislature have been convicted of misappropriating state funds. If the top two guys were doing it, what is the probability that they are the only two?
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