>> Tillerson’s company has been
under formal investigation by the Securities and Exchange Commission since August for failing to accurately value its proven oil reserves.Those reserves are critical to investors for assessing the future viability of the company. Without the certainty that the company can keep crude oil flowing decades into the future, ExxonMobil stock would plummet. Rewriting the disclosures to investors with lower valuations would cost the company billions of dollars. And actually the entire oil and gas industry would be affected by a new standard rather than the current ad hoc system.
The investigation is a kind of companion piece to the “
Exxon Knew” campaign, which charges that the world’s largest publicly traded oil company was aware of the catastrophic effects of climate change nearly 40 years ago, but lied to shareholders about these risks to its business model. Attorneys general in over a dozen states have
opened investigations into these matters.
But the SEC probe goes further. The agency requested documents from PricewaterhouseCoopers, ExxonMobil’s auditor, looking at how the company accounts for future costs from global climate regulations. If it becomes more costly to initiate drilling because of the so-called “price of carbon,” or regulations that mandate reductions to greenhouse gas emissions, Exxon might have to shelve the projects, taking a hit to future profitability. Even if the United States dumps the Paris climate accord (something a Secretary of State Tillerson may be in position to influence), Exxon does business worldwide, including with countries who would be likely to stay in the pact and work to cut emissions. Public companies must account in their financial disclosures for knowable risks to investors, and climate regulations would certainly fit the bill for an oil giant.
... The man who wants to appoint him, Trump, will also have the opportunity to remake the SEC. Since his election, seven top officials have
announced their resignations, from chair Mary Jo White to Enforcement Division chief Andrew Ceresney to the leader of the section with primary responsibility over reviewing corporate filings, Division of Corporation Finance head
Keith Higgins.
This turnover isn’t necessarily a bad thing—the SEC’s record over Obama’s second term has been so weak that liberals have repeatedly
demanded mass firings. But Trump will get to appoint three new SEC commissioners (two seats on the five-member panel were
already vacant before White’s resignation announcement), and that new executive team will hire the top leadership. So the president-elect could make sure that ExxonMobil has little to fear from the SEC, whether or not Tillerson makes it to Foggy Bottom. (More at
yon link)
At the risk of sounding like the proverbial broken record ---- welcome to the Same Old Thing, Orange level.
As the author notes, ability to deceive investors has gotta be a point of admiration for Rump, who just paid out 25 million to make a lawsuit for exactly that kind of fraud go away before the Electoral College does its thing.
