Brazil’s Petrobras May Pay Billions in U.S. Class Action Case

By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – A class action suit filed in the United States on behalf of stock investors at the New York Stock Exchange may yield ‘tens of billions of dollars’ for the plaintiffs, a bigger settlement than that awarded to Enron plaintiffs, of US$7.2 billion, say economic analysts. The case is scheduled to go to trial on September 19th, 2016.

The action suit, alleges that its senior Petrobras executives were involved in a multi-year, multi-billion dollar money-laundering and bribery scheme, which was concealed from investors when the investment was made.

Due to the bribes, say the petitioners, the price of Petrobras shares plummeted, leading to million-dollar losses. Among the plaintiffs are large pension funds as well as smaller investors in the U.S. and other parts of the world.

According to Pomerantz LLP, the New York law firm leading the charge against the Brazilian oil giant, senior company executives have openly admitted wrongdoing.

“In testimony released by a Brazilian federal court, the executive in charge of Petrobras’ refining division confessed that Petrobras accepted bribes from companies to whom Petrobras awarded inflated construction contracts and then used the money to bribe politicians through intermediaries to guarantee they would vote in line with the ruling party while enriching themselves,” says the law firm in a press release.

“For Petrobras to say, ‘We’re the victims,’ when their executives were perpetrating this scheme suggests that they haven’t learned their lesson,” Jeremy A. Lieberman, lead Pomerantz counsel in the Petrobras case was quoted as saying. “This is not just an incident of a few rotten apples on an otherwise pristine tree.”