(11 December 2019)DAILY MARKET BRIEF 2:Exxon Found Not Guilty of Fraud in Climate-Change Accounting Case

A New York state judge found Exxon Mobil Corp. not guilty of fraud, saying that the New York state attorney general had failed to establish the oil giant had deceived its investors about how it accounted for the cost of future climate-change regulations. The verdict, which capped a nearly three-week civil trial between Exxon and the New York attorney general's office, is a victory for the company, which had spent several years fighting the case. The company is also battling similar accusations in other state and federal courts. In his 55-page ruling, New York State Supreme Court Justice Barry Ostrager said the attorney general's office had failed to prove the company violated either the Martin Act, a broad antifraud statute commonly used to pursue financial crime, or other similar laws. "The Office of the Attorney General failed to prove, by a preponderance of the evidence, that ExxonMobil made any material misstatements or omissions about its practices and procedures that misled any reasonable investor," Justice Ostrager wrote. Still, he noted the case was a securities-fraud one, and his ruling only revolved around that issue. "Nothing in this opinion is intended to absolve ExxonMobil from responsibility for contributing to climate change through the emission of greenhouse gases in the production of its fossil fuel products," the judge wrote.

By Peter Rosenstreich