BP must face suits in U.S. by foreign investors, judge says

BP must face suits in U.S. by foreign investors, judge says

MARGARET CRONIN FISK and LAUREL BRUBAKER CALKINS

HOUSTON (Bloomberg) -- BP Plc, facing as much as $2.5 billion in claims by U.S. shareholders for lost stock value connected to the 2010 Gulf of Mexico oil spill, must fight suits by foreign investors seeking millions of dollars more, a judge ruled.

U.S. District Judge Keith Ellison in Houston said U.S. securities law doesn’t bar foreign investors who bought BP common shares on exchanges overseas from pursuing their claims under English law in his court. Ellison earlier allowed U.S. pension funds holding London shares the right to sue under British law.

“The court once again declines to dismiss English law securities fraud claims,” Ellison said in a ruling unsealed Oct. 1. A U.S. securities law cited by BP in its request for dismissal “simply does not -- on its face -- preclude foreign law claims,” he said.

Pension funds in the UK, Germany and other countries that bought shares on the London exchange sued BP in Houston federal court, claiming the company pumped up the value of its stock by downplaying the size of the spill.

London-based BP said the foreign funds weren’t allowed to sue in the U.S. and were attempting to avoid the harsher British court system, where plaintiffs would have to pay both sides’ costs if they lost. BP said the funds were trying to get around U.S. law limiting securities litigation.

Geoff Morrell, a BP spokesman, didn’t immediately respond to a call and email seeking response to Ellison’s ruling.

U.S. Investors

Other investor claims against BP are pending in the Houston court, including the class action by holders of American depositary receipts who allege $2.5 billion in lost stock value, according to a company filing.

A trial on these claims is scheduled for May. It may be averted because BP has appealed Ellison’s earlier order allowing the investors to sue as a group.