Robbins Arroyo LLP: Cobalt International Energy, Inc. (CIE) Misled Shareholders According to a Recently Filed Lawsuit
Robbins Arroyo LLP announces that a shareholder action was filed in the District Court of Harris County, Texas. The complaint is brought on behalf of Cobalt International Energy, Inc. (NYSE: CIE) after Cobalt officials breached their fiduciary duties by making misleading statements concerning the existence of oil in two of the company’s major wells located offshore of Angola. Cobalt, through its subsidiaries, engages in the exploration and production of oil-focused, below-salt exploration prospects, and is focused primarily in off-shore drilling in Angola.
Cobalt Accused of Misrepresenting Its Angolan Oil Wells
According to the complaint, Cobalt’s filings with the U.S. Securities and Exchange Commission represented that its offshore Angolan wells—Lontra and Loengo—had significant amounts of oil that would be lucrative for Cobalt. Cobalt represented the Lontra site as “large,” “oil-focused,” and “high impact,” and continued to tout the wells throughout 2013 in press releases and investor conference calls and presentations. However, the complaint asserts that the highly-touted Lontra well had a large amount of gas to which Cobalt lacked the rights, and the Loengo well was a “dry hole” containing no oil whatsoever. On December 1, 2013, Cobalt admitted to investors that Lontra contained more gas than it had originally estimated. On this news, Cobalt stock fell nearly 17% to close at $18.54 per share on December 2, 2013.
Following the disappointing news about the Lontra well, Cobalt shifted its focus to the Loengo well, publicly emphasizing its potential high oil content. However, unknown to investors, the company’s former Chief Investment Offer stated that Loengo was not a good prospect and there was no chance of success on that well. On November 4, 2014, Cobalt disclosed dire negative financial results and the lack of oil or gas in its Loengo well. The complaint alleges that the company’s statements touting the wells were misleading because Cobalt failed to adequately investigate the amount of oil in the wells and failed to adequately test them before making statements regarding their oil content. The complaint also alleges that Cobalt officials, at the direction of executives at one of Cobalt’s Angolan partners, delayed disclosing that the company had hit a gaseous hydrocarbon column. Further, corporate insiders profited from their misleading statements by selling Cobalt securities for their own benefit, obtaining more than $1.33 billion.
Cobalt Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.
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