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- May 10, 2007
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Transocean LTD investors file lawsuit over alleged securities laws violations
According to the complaint the plaintiff alleges that Transocean LTD and its Chief Executive Officer violated Securities Exchange Act of 1934 in connection with the dissemination of false and misleading statements about its deficient safety protocols, recurring blowout preventer ("BOP") problems, and its operating and safety record.
The complaint alleges that in the last ten years, the defendants have been apprised of the serious hazards associated with Transocean's use of certain blowout preventers on ultra-deepwater drilling engagements. Despite these warnings and defendants' knowledge that a blowout preventer failure would likely result in scores of fatalities and millions of gallons of oil being released into the surrounding waters, defendants opted to conceal their knowledge of these known hazards while making false and misleading statements throughout 2009 and into 2010. Then, on April 20, an explosion on the Deepwater Horizon offshore drilling rig operating off the coast of Louisiana resulted in a fire that sank the rig, caused a large-scale ongoing oil spill leaking an estimated 5,000 barrels of oil a day, and killed 11 workers including nine Transocean employees. Even though the cause of the explosion is still under investigation more than two dozen lawsuits have reportedly already been filed claiming the explosion was caused when workers for oil services contractor Halliburton Inc. improperly capped the well, a process known as cementing. Executives representing Transocean and Halliburton reportedly will say BP had the lead decision-making role. But Lamar McKay, chairman of BP America Inc., said in testimony prepared for a Senate Energy Committee hearing that “Transocean’s blowout preventer failed to operate”. Transocean shares have dropped 28 percent since the April 20 explosion. While Transocean LTD stock (NYSE:RIG) was trading as High as $94.88 per share at its 52weekHigh and in the excess of $90 per share as early as in Mid-April it slide to under $66.69 per share, and traded recently at $66.34 per share.
According to the complaint the plaintiff alleges that Transocean LTD and its Chief Executive Officer violated Securities Exchange Act of 1934 in connection with the dissemination of false and misleading statements about its deficient safety protocols, recurring blowout preventer ("BOP") problems, and its operating and safety record.
The complaint alleges that in the last ten years, the defendants have been apprised of the serious hazards associated with Transocean's use of certain blowout preventers on ultra-deepwater drilling engagements. Despite these warnings and defendants' knowledge that a blowout preventer failure would likely result in scores of fatalities and millions of gallons of oil being released into the surrounding waters, defendants opted to conceal their knowledge of these known hazards while making false and misleading statements throughout 2009 and into 2010. Then, on April 20, an explosion on the Deepwater Horizon offshore drilling rig operating off the coast of Louisiana resulted in a fire that sank the rig, caused a large-scale ongoing oil spill leaking an estimated 5,000 barrels of oil a day, and killed 11 workers including nine Transocean employees. Even though the cause of the explosion is still under investigation more than two dozen lawsuits have reportedly already been filed claiming the explosion was caused when workers for oil services contractor Halliburton Inc. improperly capped the well, a process known as cementing. Executives representing Transocean and Halliburton reportedly will say BP had the lead decision-making role. But Lamar McKay, chairman of BP America Inc., said in testimony prepared for a Senate Energy Committee hearing that “Transocean’s blowout preventer failed to operate”. Transocean shares have dropped 28 percent since the April 20 explosion. While Transocean LTD stock (NYSE:RIG) was trading as High as $94.88 per share at its 52weekHigh and in the excess of $90 per share as early as in Mid-April it slide to under $66.69 per share, and traded recently at $66.34 per share.
