BP says US to probe trading around oil spill
London, July 28, 2010
BP said the US Securities and Exchange Commission and the Justice Department had launched a probe into market trading connected to the oil giant's Gulf of Mexico oil spill.
"The Securities and Exchange Commission and DoJ are conducting informal inquiries into securities matters arising in relation to the incident," the company said in a statement.
A company spokesman declined to give any comment on the details of the inquiries. Representatives for the SEC and the Justice Department also declined to comment.
The securities probe is one of a myriad of investigations into the company and others tied to the oil spill. The Justice Department is already looking into potential civil and criminal violations of federal environmental laws.
Additionally, BP said in its semi-annual report filed with the SEC that the company has been named as a defendant in more than 300 private civil lawsuits related to the April 20 explosion aboard the rig drilling its oil well and the subsequent spill.
One former SEC lawyer who is now in private practice said securities regulators could be looking at a number of issues related to BP, including whether it adequately disclosed the risks to shareholders, whether there was unusual trading in its shares, or whether other filings were complete and accurate.
The SEC could examine whether BP's securities filings turned "out to be a fair representation of ... the risks and then the response," said the lawyer, who was not involved in the case and declined to be further identified.
BP in its annual report for 2009 spelled out some operational risks that included potential oil spills.
"Failure to manage these risks could result in injury or loss of life, environmental damage, or loss of production and could result in regulatory action, legal liability and damage to our reputation," the report said.
BP also said in that filing that drilling and production was subject to "natural hazards and other uncertainties, including those relating to the physical characteristics of an oil or natural gas field."
BP's stock hit a 52-week low of $26.75 on June 28 when a tropical storm delayed work in the Gulf. They were as high as $59.10 the day after the explosion.
Its shares closed at $38 at the end of regular trading on Tuesday on the New York Stock Exchange. – Reuters