Scott + Scott, LLC Files Class Action against Royal Dutch Petroleum Company as SEC Announces Formal Investigation
February 23 2004 - 9:10AM
PR Newswire (US)
Scott + Scott, LLC Files Class Action against Royal Dutch Petroleum
Company as SEC Announces Formal Investigation Scott + Scott, LLC
Represents Securities Purchasers in Yet Another Restatement
Accounting Fraud Case COLCHESTER, Conn., Feb. 23 /PRNewswire/ --
Scott + Scott, LLC (nrothstein@scott-scott.com or
scottlaw@scott-scott.com), a law firm based in Connecticut with
offices in Ohio and California, announces that it has filed a
securities fraud action on behalf of purchasers of the securities,
including the common stock traded in overseas markets and the
American Depository Receipts trading on the NYSE, of Royal Dutch
Petroleum Company ("Royal Dutch") and/or The Shell Transport and
Trading Company, PLC ("Shell Transport") between December 3, 1999
and January 9, 2004, inclusive (the "Class Period"), seeking to
pursue remedies under the Securities Exchange Act of 1934 (the
"Exchange Act"). A copy of the complaint filed in this action is
available from the Court, or can be viewed at
http://www.scott-scott.com/. You can contact Scott + Scott, LLC at
800/404-7770 (CT time) or 800/332-2259 (CA time). On February 19,
2004, the Royal Dutch/Shell Group announced that the Securities and
Exchange Commission had begun a formal investigation into the
Company's surprise restatement of its oil and natural gas reserves.
The action is pending in the United States District Court for the
District of New Jersey against defendants Royal Dutch, Shell
Transport, Shell Petroleum N.V., the Shell Petroleum Limited,
Maarten van der Bergh, Judy Boynton, Malcolm Brinded, S.L. Miller,
Harry J.M. Roels, Paul D. Skinner, M. Moody- Stuart, Jeroen van der
Veer, and Philip R. Watts. According to the complaint, defendants
violated federal securities laws (sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and Rule 10b-5 promulgated
thereunder, and all amendments thereto) by issuing a series of
material misrepresentations to the market during the Class Period.
The complaint alleges that defendants deliberately violated
accounting rules and guidelines relating to oil and gas reserves
which resulted in a material overstatement of oil and gas reserves,
the eventual disclosure of which damaged purchasers of Royal Dutch
and Shell Transport securities and negatively impacted the
investment community. The complaint alleges that Royal Dutch and
Shell Transport had classified and reported, in SEC filings and
other public documents, certain reserves as "proved reserves" from
a project off the western coast of Australia called the Gorgon
Joint Venture (and other projects in Nigeria). In fact, without the
investors knowledge, the reserves did not meet SEC and industry
requirements necessary to be classified as "proved," and were
improperly reported as such in Royal Dutch's and Shell Transport's
financial reports. These reports were therefore materially and
artificially inflating a key measure of the companies' financial
position and competitive standing. As a result of these material
misrepresentations,Royal Dutch and Shell Transport's true value in
the marketplace was severely overstated and misunderstood. On
January 9, 2004, Royal Dutch announced that it was going to
write-down its proved oil and gas reserves by 20%, or 3.9 billion
barrels, from 19.5 billion barrels to 15.6 billion barrels. The
write-down: (a) cut Shell's reserve life from 13.4 years to 10.6
years; (b) increased its worldwide 5-year average reserve
replacement cost per barrel from $5.49 to $12.57 -- $7.06, or 128%
greater than the industry average of $5.51; (c) increased Shell's
finding and development costs to $7.90 per barrel -- well above the
costs of its competitors; and (d) reduced Shell's Appraised Net
Worth downward by up to 7.1%, or $9.6 billion. Following the
announcement, Royal Dutch ADRs fell 7.87% from $52.76 to $48.61 on
the NYSE and Royal Dutch ordinary shares fell by 7.10% from the
U.S. equivalent of $52.91 to $49.15 on the Amsterdam exchange.
Shell Transport ADRs were down 6.96% from $44.81 to $41.69 on the
NYSE and Shell Transport ordinary shares were down 6.84% on the
London exchange from the U.S. equivalent of $7.36 to $6.86. In
addition, Moody's placed the AAA rating of Royal Dutch and Shell
Transport under review for possible downgrade because the
write-down materially and adversely affected the companies'
reserves-to-debt ratio. Following the belated disclosure, most
analysts and commentators concluded that, because of the magnitude
of the write-down and the clear SEC and industry guidelines
relating to reserve classification, the reserve overstatements
could not have been a result of error or accident, but rather, that
the reserves were knowingly overstated to preserve the companies'
credit rating and to shore up their competitive position. If you
bought the securities (including ordinary shares and/or ADRs) of
Royal Dutch and/or Shell Transport, between December 3, 1999 and
January 9, 2004 and sustained damages, you may, no later than March
26, 2004, request that the Court appoint you as lead plaintiff. A
lead plaintiff is a representative party that acts on behalf of
other class members in directing the litigation. In order to be
appointed lead plaintiff, the Court must determine that the class
member's claim is typical of the claims of other class members, and
that the class member will adequately represent the class. Under
certain circumstances, one or more class members may together serve
as "lead plaintiff." Scott + Scott, LLC, a Connecticut-based law
firm with offices in Ohio and California, is a law firm with a
national practice and reputation. Scott + Scott has dedicated
itself to client communication and satisfaction. The firm is
currently litigating major securities, antitrust and employee
retirement plan cases throughout the United States and represents
pension funds, charities, foundations, individuals and other
entities worldwide -- both as class and non-class cases. Any member
of the purported class may move the Court to serve as lead
plaintiff. Signing and retaining Scott + Scott, LLC does not
automatically make you a lead plaintiff. If you wish to serve as
lead plaintiff, you must move the Court no later than March 26,
2004. If you wish to discuss this action with an attorney or have
any questions concerning this notice or your rights, please contact
attorney Neil Rothstein at or by calling 1-800-332-2259. Scott +
Scott, LLC is located at 108 Norwich Avenue, Colchester, CT 06415;
phone: 860/537-3818; fax: 860/537-4432. DATASOURCE: Scott + Scott,
LLC CONTACT: Neil Rothstein of Scott + Scott, LLC,
nrothstein@scott- scott.com, +1-800-332-2259, +1-860-537-3818 or
fax +1-860-537-4432 Web site: http://www.scott-scott.com/
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