The Asociacion de Afectados de Petrobras, a Madrid-based shareholder association; International Securities Associations & Foundations Management Company for Damaged Petrobras Investors (Bolsa Madrid) Ltd. (“ISAF Petrobras”); and a coalition of international law firms, including Cremades Calvo-Sotelo, Motley Rice, and Lowey Dannenberg Cohen & Hart, announce that they have prepared a substantial criminal complaint against Petroleo Brasileiro SA, certain Petrobras group entities and (formerly) high-ranking Petrobras officers (collectively, “Petrobras et al”) and intend to file it in Criminal Court in Madrid in the coming weeks.
The complaint will be filed on behalf of all Petrobras investors who bought shares through Bolsa de Madrid (LATIBEX index) and all investors who bought shares through BOVESPA in Sao Paulo but brought back those shares to Spain clearing through Iberclear and kept and custodied the shares in Spain thereafter, and suffered losses as a result of the allegedly long-running fraud perpetrated by Petrobras et al. Petrobras is majority-owned by the Brazilian government.
The complaint will allege that when years of complex fraud and bribery schemes orchestrated by management and officials of Petrobras were finally revealed to the public in 2014, investors lost billions of dollars, euros and Brazilian reals, resulting from significant asset write-downs and precipitous declines in Petrobras share prices.
Petrobras shares are listed on the BOVESPA in Sao Paulo and became subject to compliance with European regulatory standards when Petrobras made its shares available for trading and clearing via LATIBEX on Bolsa Madrid and Iberclear, respectively, and subjected itself to compliance with the Comision Nacional del Mercado de Valores (“CNMV”), the regulatory body of Spanish financial markets. The CNMV is a member of and subject to the regulations of the European Securities and Markets Authority.
Petrobras specifically desired access to investors in European and other international capital markets and promoted itself to them. To increase investors’ confidence, it declared its expected compliance with a well-developed European market regulation system and its willingness to be governed by it.
Whether the Petrobras shares are trading in Brazil or Europe, the security identifiers for both the common and preferred shares are in fact the same in each jurisdiction. Shares can be transferred back and forth for custody between Brazil and Europe as a result of the CNMV regulatory framework and the arrangement via Iberclear in Spain.
Efforts are underway to recover investor losses related to the revelations of allegations of rampant corruption, money laundering, bribery and violations of securities laws in multiple jurisdictions. The first investor lawsuit was filed as a class action in the United States on behalf of investors who purchased American Depository Shares on the New York Stock Exchange, but is limited to only cover losses in those ADS shares and certain US dollar denominated bonds. Importantly, this US class action does not cover investor losses that stem from the largest class of shares, which traded on the BOVESPA or LATIBEX, and it will not cover losses on certain other bonds, including Euro denominated bonds.
Goals of the Legal Action & How to Recover Losses
Spain’s legal framework does not have the concept of a securities class action as it exists in the United States. Damaged Petrobras investor plaintiffs seeking financial recovery must enter or “opt-in” to the collective litigation to be entitled to participate in any settlement or litigation-related proceeds. Additional goals of the collective litigation include increasing the level of influence of independent directors and safeguarding the interest of all stakeholders through improvement in compliance standards and control measures, to a level normally expected by international institutional investors. It is important that investors (a) who purchased common and preferred shares of Petrobras anytime between 2004 and July 28, 2015 and (b) suffered and/or are in danger of suffering (further) damages as a consequence of the alleged fraud, contact ISAF Petrobras so that it can determine eligibility to pursue claims in the Spanish court system. Eligible damaged investors can join Asociacion de Afectados de Petrobras with no upfront cost or risk.
About the Shareholder Association
Association Organizers. The Asociacion de Afectados de Petrobras, a Madrid-based shareholder association, has appointed ISAF Petrobras to interact with investors, law firms, service providers, and media and to undertake all administrative tasks, including the collection of client trading data, loss calculations, loss certification, and all aspects of documentation handling. In addition, ISAF Petrobras will finance all litigation costs, including legal fees, experts’ fees, processing, data collection, administration, and claims administration, including potential payout administration. Apart from this Spanish association, an affiliate of ISAF Petrobras – International Securities Associations & Foundations Management Company for Damaged Petrobras Investors (Bovespa) Ltd. – is fully funding all efforts by Stichting Petrobras Compensation Foundation, a Dutch-based foundation, to pursue restitution for damaged investors.
Law Firms. Cremades Calvo-Sotelo, the pre-eminent Spanish securities law firm, is cooperating with securities litigation firms Motley Rice and Lowey Dannenberg Cohen & Hart.
Cremades & Calvo-Sotelo is considered one of Spain’s leading law firms, specializing, amongst other fields, in collective securities actions. Motley Rice is one of the largest plaintiffs’ litigation firms in the United States, with a tradition of representing those whose rights have been violated. Lowey Dannenberg Cohen & Hart focuses its practice on complex litigation, including securities and commodities litigation, antitrust litigation and healthcare litigation.
Claims Analysis and Processing. Battea Class Action Services, LLC, an international leader in the class action securities claims filing space, has been retained to collect client data and process and validate investor loss calculations.
Damaged investors are offered a “success only” contingency fee cost structure. By accepting the contingency fees, the damaged investors are offered a no-risk and upfront cost-free participation (“no cure – no pay”).
For more information, please visit www.isafpetrobras.com
Investor Access Information:
+44 203 769 7223
ISAF, London, UK
+55 212 018 1197
ISAF, Rio De Janeiro, BR
+31 102 680 138
ISAF, Rotterdam, NL
+34 910 602 178
ISAF, Madrid, ES
Media Access Information
+1 203 252 3378
ISAF, Stamford, CT, USA