The Attorney General's Office says the oil and gas behemoth didn't share one of its calculations of the future costs of the rules, causing shareholders to overvalue the company's stock by $476 million to $1.6 billion, The Wall Street Journal reported.
|XOM||EXXON MOBIL CORP.||115.59||-2.10||-1.78%|
Exxon Mobil, however, told FOX Business that it met its responsibility to shareholders and argued that the case is politically motivated. Former Exxon Mobil CEO Rex Tillerson, who left the post for a stint as President Trump's secretary of state, is expected to testify during the trial.
The state's case hangs on the Martin Act, a New York law that has been used to crack down on misleading information provided to shareholders. Passed in 1921, the law doesn't require the state to prove fraudulent intent by the corporation or that any investor was actually misled.
The case may be a boon for prosecutors, the Wall Street Journal's editorial board wrote Monday."We doubt [New York Attorney General Letitia] James cares all that much if she wins," the editors wrote. "If she loses at trial, she'll appeal to higher state courts to keep the publicity alive."
The trial will focus on a process that Exxon Mobil said it uses "to ensure company investments take into account the impact of current and potential climate-related regulations."
"In the absence of a uniform, globally accepted cost of carbon, ExxonMobil uses two distinct metrics to account for the impact of current and potential climate-related regulations," a company spokesperson told FOX Business. "The first is a 'proxy cost,' which is intended to reflect the impact of all climate policies that could reduce demand for oil and natural gas globally. The other, a greenhouse gas cost or 'GHG cost,' reflects actual costs that might be imposed directly on the emissions of oil and gas projects as a result of specific laws in a jurisdiction."
Shares of Exxon Mobil dipped on Monday but rallied later in the day.