Petrobras Bribery Claims Advance in New York

MANHATTAN (CN) - Shareholders accusing Brazil-run Petrobras of hiding a bribery scheme for years while selling $98 billion in securities can advance several claims, a federal judge ruled.

U.S. District Judge Jed Rakoff did not reveal his reasoning for the ruling in a three-page order dated Thursday but unsealed Friday.

More than a dozen lawsuits poured into the Southern District of New York late last year after the Securities and Exchange Commission said it was investigating Brazil's largest corporation for bribery allegations.

The consolidated class action led by the Liverpool-based pension fund Universities Superannuation Scheme (USS) places the class period between Jan. 20, 2010, to March 19 this year.

That amended complaint, filed on March 27 this year, fell weeks after more than a million Brazilians took to the streets to call for the impeachment of the country's president, Dilma Rousseff, who served as chairwoman of Petrosbras between 2003 and 2010.

The Wall Street Journal and other outlets reported at the time, shareholders noted, that the corruption probe led to more than 40 indictments on racketeering, bribery and money laundering charges, and thousands of others were under investigation.

The shareholders claimed that Petrobras, its Dutch subsidiary and more than a dozen executives colluded to inflate bids for more than a decade.

Their attorneys at Pomerantz announced Thursday that they are moving on to discovery after defeating "many" challenges to their case.

While Petrobras ducked a handful of the lawsuit's nine claims, Pomerantz partner Jeremy Lieberman said his clients were "pleased" with the court's decision.

"The duration and scope of the fraud perpetrated by Petrobras and the individual defendants is unprecedented," Liberman said in a statement. "We look forward to aggressively litigating our case and working to achieve a substantial recovery for harmed shareholders - the true victims of defendants' fraud."

Petrobras spokeswoman Tatiana Fontenelle emphasized that the judge dismissed claims related to a 2012 U.S. bond issue and compelled arbitration for counts related to shares acquired in Brazil.

"Petrobras will continue steadfast in defending its own interests," Fontenelle said.

Promising to release his reasoning for the decision "in due course," Rakoff ordered the parties to prepare a case management plan to prepare for a trial "no later than February 1, 2016."

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