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Cases / Law, regulation and treaties · United States · 2006

Shell reserves overstatement case: investors settle for $352.6 million

Short record: the main facts, with sources. A full case file has not been prepared.

Nature's voice · report
No measurement of the harm done to me here is on record.
Did nature suffer? Not measured.
Not on record
  • The record does not name which of my species, waters, soils or forests were harmed.
What the record lacks: 1 none on record · 3 insufficient · 1 not measured See the gaps

Shell settled an investor class action for $352.6 million plus administrative costs, and the SEC took no action against three Shell executives in 2006. The sources reviewed report the 2004 reserve cut itself only as unverified.

What?
Shell settled a European investor class action for $352.6 million plus administrative costs, and in 2006 the SEC took no action against three of its executives. Natural Gas Intelligence
Where?
United States (SEC decision) and the Netherlands (class action). Oil Change International
When?
SEC decision in August 2006; the date of the class action settlement is not given. Oil Change International
Who?
Gained
  • European investors in Shell — received a $352.6 million class action settlement, plus administrative costs Natural Gas Intelligence
Lost
None on record
Harmed
None on record
Why?
Not stated in the sources reviewed.
How?
Through an investor class action in the Netherlands; the sources reviewed do not describe how the overstatement was found. Natural Gas Intelligence
6 of 6 questions answered from the record

What happened

The record, in order.

Oil Change International reported in August 2006 that the SEC took no action against three Shell executives over the reserves overstatement, and that no criminal prosecution was recorded.

The same record puts Shell's total over-declaration at 4.5 billion barrels, or 23%.

Shell settled a class action with more than 50 European investors for $352.6 million plus administrative costs, according to Natural Gas Intelligence.

    In court and with insurers

    Every proceeding and every insurer decision on record.

    Lawsuits and rulings

    No court case on record. No court has ruled on this case.

    Insurers

    No insurer decision on record.

    What we don't know

    Undisclosed, unproven, untried: recorded as data.

    Nature

    • Not measured Harm to nature: The record holds no measurement of harm to nature.

    Record

    • Insufficient Reported but not verified: Shell cut its reserves in 2004 by about 20% at first, and by 23% in total (4.5 billion barrels) after later corrections.
    • Insufficient Reported but not verified: Shell settled with the SEC for $120 million and with the UK Financial Services Authority for £17 million, without admitting guilt.
    • Insufficient Reported but not verified: the company's chief executive resigned after the reserve cut.
    • None on record Not stated: the date of the class action settlement, and whether a court approved it.

    Did the harm stop?

    Not stated in the sources reviewed.

    Who paid?

    Not stated in the sources reviewed.

    Sources

    Voices on record: — Company or project— Government and regulators— Courts✓ Press and investigations✓ Communities and civil society— Researchers

    Press and investigations

    Communities and civil society

    Connected cases

    Related matters, and cases linked to this one through the same organisations, with the role each played in both.
    Terms used on this page

    Law and courts

    Arbitration
    A private dispute process in which an appointed arbitrator, instead of a court, decides the case.
    Class action
    A single lawsuit brought on behalf of a large group of people with similar claims.

    Institutions

    SEC
    The US Securities and Exchange Commission, which regulates securities markets and what companies tell investors.

    Insurance

    Underwriter
    An insurer, or a person at an insurer, who assesses a risk and decides whether and on what terms to insure it.
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