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Securities Class Action Related To Oil Spill Filed Against Anadarko Petroleum

NEW YORK - Murray, Frank & Sailer LLP on Aug. 4 filed a class action complaint in the U.S. District Court for the Southern District of New York on behalf of purchasers of  Anadarko Petroleum Corporation publicly traded securities between June 12, 2009, and June 9, 2010. The complaint seeks damages for alleged violations of the Securities Exchange Act of 1934 (Harris, et al. v. Anadarko Petroleum Corporation, et al., No. 1:10cv5894, S.D. N.Y.).

The complaint names Anadarko Petroleum Corporation and certain officers and directors of the company as defendants and alleges that during the class period, the defendants issued materially false and misleading statements regarding the company's results, risk profile and potential liabilities. Specifically, the defendants claimed they had properly reserved for, and insured against, foreseeable drilling-related contingencies.

According to the filing, the defendants' public statements were materially false and misleading when made because they failed to disclose, among other things: that there was no effective Oil Spill Response Plan for the Macondo/Deepwater Horizon, in which Anadarko is a 25 percent owner; that BP plc, Anadarko's partner in the Macondo/Deepwater Horizon, was implementing drilling procedures that would cut costs at the expense of safety, thereby increasing the economic risk of a disaster; that the company lacked adequate systems of internal, operational or financial controls to maintain adequate insurance reserves or to meet the known or foreseeable risks associated with its deepwater drilling liabilities; and that the defendants lacked any reasonable basis to claim that Anadarko was operating according to plan, or that Anadarko could achieve guidance sponsored and/or endorsed by defendants. As a result of defendants' false statements, Anadarko's securities traded at artificially inflated prices during the class period, it is alleged.

On April 20, 2010, the Macondo/Deepwater Horizon rig exploded, killing 11 platform workers and injuring 17 others. In spite of this disaster, the defendants continued to issue materially false and misleading statements claiming that the company would likely incur only approximately $177.5 million in liability for its part in the Macondo/Deepwater Horizon venture, the complaint says.

On June 1, 2010, the truth concerning Anadarko's business and liabilities was revealed when the public learned that the Macondo/Deepwater Horizon well could not be capped and investors came to realize there was effectively no plan in place to stop the spill, according to the lawsuit. That day, shares of Anadarko fell more than $10 per share, or approximately 20 percent, to close at $42.10 per share on high trading volume. Later, on June 9, 2010, investors learned of the material deficiencies in the Macondo/Deepwater Horizon Oil Spill Response Plan as well as the company's liability for more than $1 billion in cleanup costs, it says. This information resulted in another drop in value of Andarko's stock of about 19 percent, according to the complaint.

The case has been referred to Judge Paul G. Gardephe.

The defendants are represented by Brian Philip Murray and Gregory Alan Frank of Murray, Frank & Sailer in New York.