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Chevron Investors Ask SEC to Investigate CVX for Lying to Shareholders about $19B Ecuador Judgment

Published 05-23-13

Submitted by Amazon Defense Coalition

Fourteen shareholder groups petitioned the Securities and Exchange Commission today to investigate lies and sins of omission to shareholders about the severity of the $19 billion judgment against the company for destruction of the environment and public health in Lago Agrio, Ecuador. The groups say Chevron is misleading investors about what the judgment could mean for Chevron’s financial future.

In their letter, the shareholders implore the SEC to “investigate evidence that Chevron Corporation is violating securities laws by repeatedly making misrepresentations and material omissions regarding the impact on the company of its adverse judgment in Ecuador of $19 billion for pollution of the land and water of rainforest communities.” The full letter and list of signatories can be found here. The judgment was rendered in Ecuador in 2011 and upheld in 2012. This move comes following the release of an earlier report detailing Chevron’s attempts to gain political influence in order to evade justice.

Shareholders have made similar requests to the SEC in previous years, but significantly more groups joined in this year’s complaint – the 2012 letter represented three shareholder groups – as more of Chevron’s fabrications become uncovered. “Investors are growing less willing to swallow Chevron’s version of events,” said Simon Billeness, a representative of the shareholder groups who signed the letter. “The Lago Agrio plaintiffs are aggressively pursuing Chevron assets abroad in order to enforce the judgment. It’s becoming harder to convince shareholders that the company won’t be hurt by Chevron’s deceit and irresponsibility.”

Courts in Argentina have frozen Chevron’s assets and 40 percent of its revenues. A Brazilian enforcement action is pending and filings in other countries will come later this year. A provincial court in Canada recently acknowledged jurisdiction for the Ecuadorians but said Chevron subsidiaries were shielded. That ruling will be appealed.

At Chevron’s annual shareholder meeting on Wednesday, May 29, the American Federation of State, County and Municipal Employees (AFSCME), on behalf of its 1.6 million members, will file a shareholder resolution calling for the company to publish an annual report disclosing its lobbying practices. According to a supporting statement from AFSCME, Chevron spent approximately $22.6 million in 2010 and 2011 on direct federal lobbying in the U.S.; not including funds spent lobbying the Republic of Ecuador or lobbying through organizations such as the U.S. Chamber of Commerce.

“Chevron is not doing its investors any favors by keeping them in the dark as it throws good money after bad,” said Sonia Kowal, Director of Socially Responsible Investing at Zevin Asset Management in Boston. “Shareholders deserve greater transparency and greater accountability. It's time for Chevron to find a way to stop the bleeding.”

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Amazon Defense Coalition

Amazon Defense Coalition

The Amazon Defense Coalition is a part of a regional, national and global struggle for environmental and collective rights in the Ecuadorian Amazon

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