In 2018, a shareholder class action resulted in a $2.95 billion settlement between shareholders and Brazilian state-owned oil company Petrobras.36 The reputational impact to the company was reflected by the drastically declined share price which fell to $ 3 in 2016 from a previous high of $ 72 in 2008.
The shareholder class action claimed that investors suffered large losses due to material misstatements in the company’s filings with the U.S. Securities and Exchange Commission (SEC). The total size of the settlement surpassed the total fines of $ 853.2 million levied on the company by U.S. and Brazilian authorities. This case clearly illustrates that the costs of these shareholder class actions can be very significant.
Source: The Rise of Shareholder Class Actions in Response to Corporate Misconduct — GAN Integrity blog, https://ganintegrity.com/blog/rise-of-shareholder-class-actions-in-response-to-corporate-misconduct/
