NEW YORK, Dec 22 (Reuters) - A U.S. judge has narrowed a class-action lawsuit by investors against Brazil’s state-run oil company Petrobras over losses stemming from a bribery and political kickback scandal.
But U.S. District Judge Jed Rakoff in New York otherwise denied requests by Petroleo Brasileiro SA, as Petrobras is known, to dismiss parts of the investor case.
Under the ruling, Britain’s Universities Superannuation Scheme Ltd, the class action’s lead plaintiff, and Union Asset Management Holding AG will not be able to sue over losses on Petrobras debt securities first offered on March 10, 2014, and bought by the funds after May 15, 2015.
Rakoff ruled against Petrobras on other issues, leaving the complaint against the Rio de Janeiro-based oil company and its executives almost entirely intact.
Among the points Rakoff upheld was decision by the plaintiffs to extend the class period, or the period that they are seeking redress in the courts under the Securities Exchange Act of 1934.
The period was extended by four months beyond the earlier deadline of March 27 to include allegedly misleading financial statements filed by Petrobras in April and May this year. Those statements report total corruption-related overcharges of $2.5 billion, an amount the plaintiffs consider a “whitewash.”
The true figure is closer to $30 billion, according to the plaintiffs.
The judge upheld the revised period of Jan. 22, 2010, to July 28, 2015.
Petrobras opposed the time extension on the grounds that because the plaintiffs complaint was based on public information, it would be unreasonable for them to rely on earlier fraudulent financial statements or the whitewash, the judge said.
“In effect, Petrobras is arguing (rather remarkably) that its own estimate of $2.5 billion in losses was so outlandishly incorrect that the market and investors in its securities should have known better than to rely on it,” Rakoff wrote in his decision.
Petrobras officials did not immediately respond to request for comment. Jeremy Liberman, lead council for the plaintiffs at Pomerantz LLP in New York, did not immediately respond to a request for comment.
The case is In re: Petrobras Securities Litigation, U.S. District Court, Southern District of New York, No. 14-09662. (Writing and additional reporting by Jeb Blount; Editing by Bill Trott)