St. Lucie County Fire District Firefighters’ Pension Trust Fund, et al. v. Bryant, et al.

Court: United States District Court, Southern District of Texas
Case Number: 14-3428
Judge: Hon. Nancy F. Atlas
Class Period: 2/21/2012 - 11/4/2014 (inclusive)
Case Contacts: Avi Josefson, David R. Stickney

On November 30, 2014, BLB&G filed a securities class action on behalf of St. Lucie County Fire District Firefighters’ Pension Trust Fund and Fire and Police Retiree Health Care Fund, San Antonio against Cobalt International Energy, Inc. (“Cobalt” or the “Company”), certain of its senior executives and directors, the underwriters of its securities offerings and certain investment firms that controlled the Company (collectively “Defendants”). On March 3, 2015, the Court appointed GAMCO Gold, Natural Resources & Income Trust, and GAMCO Natural Resources, Gold & Income Trust, as Lead Plaintiffs.  On May 1, 2015, Lead Plaintiffs filed a consolidated class action complaint asserting claims under Sections 11, 12(a), and 15 of the Securities Act of 1933, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, on behalf of investors in Cobalt securities during the period of March 1, 2011 to November 3, 2014, inclusive (the “Class Period”).  A copy of the Complaint is available here.  On June 30, 2015, Defendants filed motions to dismiss the Complaint.  On August 31, 2015, Plaintiffs filed briefs in opposition to each of Defendants’ motions to dismiss. On January 19, 2016, the Court denied in part Defendants' motions to dismiss

As set forth in the Complaint, the action is brought on behalf of purchasers of Cobalt’s securities between March 1, 2011 and November 4, 2014, inclusive (the “Class Period”), including: persons who purchased or otherwise acquired:  (i) Cobalt securities on the open market; (ii) Cobalt’s common stock pursuant and/or traceable to registered public offerings conducted on or about February 23, 2012, January 16, 2013 and May 8, 2013; and/or (iii) Cobalt’s 2.65% Convertible Senior Notes due 2019, pursuant and/or traceable to the registered public offering conducted on or about December 12, 2012, and/or Cobalt Convertible Senior Notes due 2024, pursuant and/or traceable to the registered public offering conducted on or about May 8, 2014 (collectively, the “Offerings”).

Cobalt is an oil exploration and production company headquartered in Houston, Texas with operations in the Gulf of Mexico and offshore West Africa.  The Complaint alleges that during the Class Period, Cobalt and certain of its senior executives violated provisions of the Exchange Act by issuing materially false and misleading press releases, filings with the Securities and Exchange Commission (“SEC”), and statements during investor conference calls.  The Complaint also alleges that in connection with the Offerings, the Company issued securities pursuant to materially misstated filings with the SEC. 

As alleged in the Complaint, Cobalt has portrayed itself as a company with “world class,” “large” and “oil-focused” wells in the Republic of Angola and claimed that the Company gained access to those wells in compliance with the U.S. law outlawing the bribery of foreign officials (the Foreign Corrupt Practices Act or “FCPA”).  In truth, Cobalt obtained access to its Angolan wells from the Republic of Angola by partnering with shell companies in Angola that were partially owned by high-level Angolan officials, putting the Company at serious risk of enforcement action by the SEC and U.S. Department of Justice (“DOJ”) for violations of the FCPA and the federal securities laws.  In addition, Cobalt misrepresented the value of its wells in Angola after the Company learned that they contained very little or no oil.

As a result of the Company’s statements to investors, the prices of Cobalt’s stock and bonds were artificially inflated during the Class Period.  Investors first began to learn the truth when:  (i) on December 1, 2013, the Company revealed negative results from its Lontra well; (ii) on August 5, 2014, it was revealed that Cobalt had paid the Angolan government for a research center that did not exist, and that the SEC had escalated its then-ongoing investigation of the Company for possible violations of the federal securities laws by issuing Cobalt a Wells Notice; and (iii) on November 4, 2014, Cobalt disclosed negative results regarding its Loengo well.  In response to these disclosures, the prices of Cobalt securities fell sharply and investors incurred significant losses as a result.

If you wish to discuss this action or have any questions concerning your rights or interests, please contact Avi Josefson (212-554-1493);