NY lawsuit against Exxon a 'shakedown': Judge Napolitano

NY lawsuit against Exxon a 'shakedown': Judge Napolitano

NY lawsuit against Exxon a 'shakedown': Judge Napolitano

A spokesman for Exxon argues that the NY attorney general has "doubled down on its tainted, meritless investigation by filing a complaint against Exxon Mobil".

New York's attorney general, Barbara Underwood, is suing the company for defrauding shareholders. None of its statements has been proven in court and a statement of defence has not yet been filed.

"I have to sympathize with the statement made by the Exxon Mobil spokesman, which was to point out something we've been principally responsible for revealing to the public and that is, their quote was, 'These baseless allegations are the product of closed-door lobbying by specialist interests, political opportunism and the attorney general's inability to admit that its three-year investigation has covered no wrongdoing, '" Horner pointed out.

The attorney general of the state of NY filed a lawsuit this week claiming Exxon Mobil misled investors about the dangers of man-made climate change, but one industry expert argues that this is merely an attempt to make energy the new tobacco.

For 14 of Exxon's oil sands projects in Alberta, Canada, Exxon's failure to apply its publicly represented proxy costs resulted in undercounting of projected greenhouse-gas related expenses by more than $25B over the projected lifetime of the projects.

NY said it wants to know exactly how the proxy cost for greenhouse gas emissions has been used in making investment decisions, corporate planning reviews, reserves estimates and evaluations for more than two dozen assets and projects.

"This new case is a claim that the company knew the dangers from climate change and the liabilities it would incur and that those greater costs were not acknowledged or were underestimated publicly", Coffee said.

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The state in June accused Exxon of failing to comply with subpoenas for cash-flow projections reflecting how it used so-called proxy costs to calculate the financial impact on its assets from future regulations. After factoring in that shadow cost of carbon, if a project still made economic sense, Exxon could justify the investment as one that would still do well in the future, even if governments cracked down on carbon.

The lawsuit alleges Exxon also ignored the impact of carbon costs on the viability of its oilsands assets which the documents say make up a quarter of its oil reserves.

In an earlier court filing, Exxon said proxy costs aren't the only way it factors carbon risks into project planning.

"It's a shakedown", he said, adding, "They won't litigate".

The complaint said ExxonMobil did less than it promised but marketed itself as a secure long-term investment.

TOM SANZILLO: What the attorney general is essentially saying is, you kept two sets of books.

The New York Times described the action as "a fairly straightforward shareholder fraud suit, the kind that New York attorneys general have long brought and successfully prosecuted under state law". The suit also asks the court to award damages, a disgorgement of all monies obtained in connection with the alleged fraud, and restitution.

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