Thursday, June 24, 2010

BP (NYSE:BP) Sued by New York State Pension Fund

In what could become a flurry of lawsuits from pension funds, the New York State Pension Fund has sued BP (NYSE:BP), while the oil continues to flow into the Gulf.

According to Controller Thomas DiNapoli, the pension fund has lost $30 million as shares in BP continue to plummet.

DiNapoli asserted the company mislead investors concerning the safety procedures in place and how effectively it was able to take care of crisis situations like the one they're in.

Since the April 20 explosion of the Deepwater Horizon oil rig, the shares of the company have fallen to about half what they were.

It's hard to tell if lawsuits like this will go anywhere, as the idea a situation happens which drives the share price of a company down can be sued against, makes it almost impossible to do business.

And if a plethora of these types of lawsuits are allowed to go forward, it's questionable as to whether or not BP could survive, including the rest of their liabilities, although there's sure to be some insurance to cover this, probably the reason for the lawsuit in the first place.

Then you also have to ask why the money wasn't moved to another type of investment when those running the fund knew without a doubt it would suffer immensely from the accident.

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