Did fossil fuel companies lie to stockholders?
Managements of publicly traded corporations are legally required to provide stockholders with accurate information about company finances. However, some fossil fuel (oil, gas and coal) producers may have intentionally provided misleading climate research to their stockholders. Currently, investigators for the New York and California attorneys general are working to determine if Exxon/Mobile and Peabody Energy (largest coal company in the U.S.) knowingly kept their own research on climate change from their stockholders. Instead, these companies appear to have lied about the existence of climate change to avoid disclosing possible negative effects on company profits.
By lying to their shareholders, company managements may have committed fraud, a felony. A few examples of recent similar acts by large corporations include tobacco companies hiding research on public health risks for more than 50 years; Enron, an oil company that reported bogus assets with phony accounting records, a $63 billion fraud; WorldCom, now a subsidiary of Verizon, committed $11 billion in financial fraud by inflating revenues and hiding decreasing earnings; and the giant Wall Street investment banks involvement in mortgage frauds that helped cause the great recession in 2008, at a cost of $5 trillion to $14 trillion.
Shareholder disclosure laws are intended to ensure a level playing field for all investors. The current attorneys general investigations must have fossil fuel companies worried. These investigations should expose the companies’ own research supporting the existence of climate change. Further, the companies’ management may face large fines and possible jail time. Hopefully, this will encourage these companies to come clean!
Bill Prowse
Carson City