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Petrobras to pay $2.95 bn to resolve investor class action over US scandal

The deal came just days after Brazil's securities regulator CVM formally accused eight former Petrobras executives of corruption

Reuters  |  New York 

The Petrobras logo is reflected in the window of the company's headquarters in Sao Paulo. File Photo: Reuters
The Petrobras logo is reflected in the window of the company's headquarters in Sao Paulo. File Photo: Reuters

Brazil's state-controlled company, Petroleo Brasileiro SA, said on Wednesday that it has agreed to pay $2.95 billion to settle a US class action brought by investors seeking to recoup money they claim to have lost as a result of a corruption scandal.

Petrobras, as the company is known, did not admit wrongdoing under the deal, which is one of the largest securities class action settlements in the United States.

US District Judge Jed Rakoff in Manhattan must approve the settlement.

Investors sued after prosecutors in accused former executives at the company of accepting more than $2 billion in bribes over a decade, mainly from construction and engineering

claimed it was itself a victim, but its market value plunged as the so-called Lava Jato or "car wash" scandal deepened.

said Wednesday that it hoped the settlement would resolve all investor claims in the United States over the scandal.

The deal does not include investors who bought non-US-based securities outside the United States, according to the company.

The deal came just days after Brazil's securities regulator formally accused eight former executives of corruption.

According to a legal filing by the regulator on Friday, the accusations relate to possible irregularities in the contracting process for three drill ships.

Among the accused in CVM's filing are former chief executives Maria das Gracas Foster and Jose Sergio Gabrielli.

The largest securities in US history include $7.2 billion stemming from the collapse of Enron, $6.2 billion over an accounting scandal at WorldCom and $3.2 billion over an accounting scandal at Tyco International, according to Stanford Law School's Securities Class Action Clearinghouse.

First Published: Wed, January 03 2018. 16:29 IST
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