May 31, 2016
Shareholder Value: In Re Barrick Gold Securities Litigation
When corporations allegedly misrepresent their compliance with mandated environmental regulations, the consequences may come at a cost to shareholders.
Motley Rice acted as sole lead counsel in this Section 10(b) securities litigation lawsuit on behalf of shareholders who purchased or acquired Barrick common stock on the New York Stock Exchange between May 7, 2009, and Nov. 1, 2013.
In Re Barrick Gold Securities Litigation
In 1994, Barrick Gold purchased the Pascua-Lama gold mine on the border between Chile and Argentina. Barrick worked from 2000 to 2006 to secure environmental approval from both governments, which included stipulations that it follow 400 environmental conditions enforced by Chilean regulators. Among the stipulations was an order to implement certain dust control measures that would prevent toxic particles from reaching nearby glaciers and poisoning the area’s water supply.
On May 7, 2009, Barrick announced that it would start construction at the Pascua-Lama site and claimed that the gold mine would produce gold at costs among the lowest in the world and would yield double-digit returns for investors. After several years of significant environmental compliance issues, in 2013 a Chilean court issued an injunction that suspended construction.
Despite this and other setbacks, Barrick allegedly released statements to investors that it was in compliance with applicable environmental regulations and that the company had adequate internal controls. Barrick spent more than $5 billion on the project before it was indefinitely halted on Oct. 31, 2013.
On April 1, 2015, the Court denied in part Barrick’s motion to dismiss the 197-page Consolidated Amended Class Action Complaint (link to Barrick Gold Order) and granted the plaintiff’s motion for class certification on March 23, 2016.
The case is In re Barrick Gold Securities Litigation, case number 1:13-CV-03851 in the U.S. District Court for the Southern District of New York. Review settlement documents.
*Prior results do not guarantee a similar outcome.
Mining Technology (Jun. 1, 2016): Barrick Gold reaches $140m settlement in US investor lawsuit over Pascua-Lama project
Reuters (May 31, 2016): Barrick Gold reaches $140 million accord in U.S. investor lawsuit
Mining (Mar. 24, 2016): US judge rules Barrick Gold must face group lawsuit over Pascua-Lama mine