NEW YORK (Legal Newsline) - An investor is suing a global resources company and certain of its current and former officers, alleging they misled investors about the company's commitment to safety.
Gary Katz, individually and for all others similarly situated, filed a class action lawsuit March 15 in
U.S. District Court for the Southern District of New York
against BHP Billiton Limited, BHP Billiton PLC, Jac Nasser, Andrew Mackenzie, Peter Beaven and Graham Kerr, alleging violations of the Securities Exchange Act.
Katz and others in the class bought American Depositary Receipts (ADRs) of BHP between Sept. 25, 2014 and Nov. 30, 2015. The suit states BHP owns a 50 percent interest in Samarco Mineracao SA, a Brazilian company that owns and operates iron ore mining facilities and a port in Brazil.
On Nov. 5, 2015, the lawsuit states, Samarco's Fundao tailings dam failed, flooding 60 million cubic meters of land with tailings believed to be contaminated with arsenic, lead, chromium and other heavy metals, and destroying the indigenous town of Bento Rodrigues.
Samarco is expected to suspend mining operations for several years, remediation costs are expected to exceed $1 billion, Samarco has had to pay hundreds of millions of dollars in fines to the Brazilian government, and BHP is subject to direct liability arising from the disaster, the complaint states.
During the class period, the suit says, the defendants made materially false and misleading statements about BHP's commitment to safety and implementation of safety and monitoring protocols. The defendants, according to the lawsuit, knew about and disregarded the precarious condition of the Fundao dam and Samarco's tailings facilities.
When the truth about BHP's operations was revealed after the Samarco disaster, the price of the ADRs significantly declined, harming investors, the suit states.
Katz and others in the class seek a jury trial, compensatory damages, attorney fees, and other costs of the suit. They are represented by attorneys Jeremy A. Lieberman, J. Alexander Hood, II, Marc Gorrie, and Patrick V. Dahlstrom of Pomerantz LLP in New York and Chicago, and by Peretz Bronstein of Bronstein Gewirtz & Grossman in New York.
U.S. District Court for the Southern District of New York Case number 1:16-CV-01920-NRB