Sunday, May 16, 2010
Steven Newman, President and CEO of Transocean
Two shareholders of Transocean Ltd., owner of the Deepwater Horizon oil rig that blew up in the Gulf of Mexico, are suing the company and claiming executives defrauded investors by concealing its history of failed equipment designed to prevent the kind of oil spill now polluting the waters off Louisiana, Alabama and Mississippi.
The plaintiffs, Thomas Yuen and Sumni Ahn, accuse Transocean of misrepresenting a string of failures involving blowout preventers (BOP), the kind of equipment that failed to stop the oil now gushing into the Gulf. Transocean claimed that the BOP problems were “anomalies” that “have all been resolved.” The class action suit alleges that these false claims caused the price of Transocean stock to rise artificially and then to plunge when the truth was revealed.
They also argue that company leaders, including Transocean President and CEO Steven L. Newman, must have known the BOP was likely to encounter problems working at deep ocean depths, based on published research about the equipment’s performance.
-Noel Brinkerhoff, David Wallechinsky
Class Says Transocean Hid History of Failure (by Sabrina Canfield, Courthouse News Service)
Thomas Yuen and Sumni Ahn et al. v. Transocean (U.S. District Court, Eastern Louisiana) (pdf)
Owner of Sunken Gulf Oil Rig Dominant Source of Problems in Gulf Since 2008 (by Noel Brinkerhoff, AllGov)
Interior Department Gave Deepwater Horizon Operators Safety Award in 2009 (by Noel Brinkerhoff, AllGov)
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