A lawyer for US oil and gas giant, ExxonMobil, Theodore Wells, says New York’s fraud lawsuit against the oil giant was a “joke” and that the state had falsely accused engineers and scientists of cooking up a scheme to mislead investors about the financial risks of climate change.
“It’s a cruel joke, your honor, because the reputations of a lot of good people have been disparaged by the bringing of this complaint,” Worldoil.com quoted Theodore Wells as saying during his closing statement after a trial that spanned three weeks.
New York sued Irving, Texas-based ExxonMobil in 2018 after a three-year probe, claiming it found evidence that the company sought to trick investors into thinking the company was planning properly for a low-carbon future and inflating its stock by as much as $1.6 billion starting in 2014.
But Wells said the state failed to prove that ExxonMobil made a material misstatement when it revealed to activist investors in 2014 that it was using a “proxy cost” to account for the future impact of climate change on the business. New York failed to prove the claims led to a drop in the company’s stock, he said.
There was “no impact on the price of the company’s stock,” Wells said. “What that shows is that nothing happened and that nobody cared. And the reason nobody cared is because nothing happened.”
Justice Barry Ostrager, of the New York State court in Manhattan, will decide the case without a jury.
Among more than a dozen witnesses who testified were activist investors who accused ExxonMobil of misleading them, ExxonMobil employees who defended the company’s practices, and expert witnesses who dueled over whether the allegations had any impact on the company’s shares.
The case hinges on whether ExxonMobil’s proxy cost — meant to account for the expected decrease in demand for fossil fuels — was supposed to be the same as another internal metric Exxon used, a greenhouse gas (GHG) cost applied to specific project proposals based on existing local taxes. Exxon says the state is trying to show a false discrepancy by conflating two carbon metrics that serve different purposes.