Investors who held ExxonMobil common stock during a specific period in 2016 and 2017 may be eligible for a portion of a $110 million class action settlement. This legal action, which has been ongoing for several years, addresses allegations that the company made misleading statements regarding the impact of climate change regulations on its financial health. If you purchased shares during the designated timeframe, understanding your rights and the steps required to file a claim is essential to ensuring you receive any compensation you are owed.
Understanding the ExxonMobil Securities Litigation
The lawsuit, often referred to as a securities class action, was brought on behalf of investors who purchased or acquired Exxon Mobil Corporation common stock between March 31, 2016, and January 30, 2017. The core of the legal dispute involved how the company accounted for the potential costs of future climate change policies and regulations.
Plaintiffs in the case alleged that ExxonMobil violated federal securities laws by making false or misleading public statements. Specifically, the lawsuit claimed the company told investors it was using a high “proxy cost” for carbon to account for future regulations, while allegedly using much lower internal figures for its actual business planning and investment decisions.
By allegedly understating these risks, the lawsuit argued that ExxonMobil artificially inflated its stock price. When the discrepancies were revealed to the public, the stock price dropped, leading to financial losses for shareholders. While ExxonMobil has denied any wrongdoing and maintains that it complied with all disclosure requirements, the company agreed to a $110 million settlement to resolve the litigation and avoid the uncertainty of a trial.
Who Is Eligible for Compensation?
To qualify for a payment from this settlement, you must meet specific criteria regarding when you purchased your shares. The legal term for this group of people is the “Settlement Class.” You are generally considered a member of this class if you meet the following conditions:
- Purchase Date: You purchased or otherwise acquired ExxonMobil common stock between March 31, 2016, and January 30, 2017, inclusive.
- Financial Loss: You suffered a recognized loss according to the Plan of Allocation approved by the court.
- Exclusions: You are not a defendant in the case, a member of their immediate families, or a legal entity in which the defendants have a controlling interest.
It is important to note that simply owning ExxonMobil stock during this time does not automatically guarantee a payment. The settlement focuses on those who purchased shares during the specified window and held them through certain “corrective disclosure” dates when the alleged truth was revealed to the market.
How to File a Claim for the Settlement
If you believe you are an eligible class member, you must take proactive steps to receive your share of the settlement fund. Compensation is not sent automatically to shareholders. You must submit a formal document known as a Proof of Claim and Release form.
Step 1: Gather Your Trading Records
Before you begin the application, you will need detailed records of your ExxonMobil stock transactions. This includes the dates of all purchases and sales, the number of shares involved in each transaction, and the price per share. You can typically find this information in your brokerage statements or trade confirmations from 2016 and 2017.
Step 2: Access the Claim Form
The claim form is usually available through a dedicated settlement website managed by a third-party claims administrator. You can choose to fill out the form online, which is often faster and reduces the risk of errors, or you can download a paper version to print and mail.
Step 3: Complete the Form Accurately
The form will ask for your personal contact information, your Social Security number or Taxpayer Identification Number, and a full history of your ExxonMobil transactions during the class period. You will also need to provide information about any shares you held at the beginning and end of the period to help the administrator calculate your total loss.
Step 4: Provide Supporting Documentation
In most cases, you must attach copies of the documents you gathered in Step 1. These serve as proof that your transactions actually occurred. Do not send original documents; photocopies or digital uploads are sufficient. Ensure that the documents clearly show the ticker symbol (XOM), the date, the price, and the quantity of shares.
Important Deadlines to Remember
In any legal settlement, timing is critical. There are several key dates that you must keep in mind to ensure your claim is considered. Missing a deadline usually means you forfeit your right to any compensation from the fund.
- Claim Filing Deadline: This is the most important date for most investors. All Proof of Claim forms must be submitted online or postmarked by the date specified in the official settlement notice.
- Exclusion Deadline: If you wish to sue ExxonMobil individually for the same issues addressed in this lawsuit, you must “opt out” or exclude yourself from the settlement by a specific date. If you do this, you cannot receive money from this settlement.
- Objection Deadline: If you remain in the settlement but disagree with its terms, the amount of attorney fees, or the plan for distributing the money, you must file a formal objection with the court by the designated deadline.
- Fairness Hearing: The court will hold a final hearing to decide whether to officially approve the settlement. You are not required to attend this hearing, but you may have the right to speak if you filed a timely objection.
How Much Money Will Investors Receive?
The amount of money each individual receives depends on several factors, and it is rarely a simple refund of the money lost. The $110 million settlement fund will first be used to pay for court-approved attorney fees, administrative costs for processing claims, and taxes. The remaining amount, known as the “Net Settlement Fund,” is then divided among all eligible claimants.
The specific amount you receive will be based on the “Plan of Allocation.” This is a formula designed by the lawyers and approved by the court to weigh losses fairly. Factors that influence your payout include:
- The total number of valid claims submitted by all investors.
- The specific dates on which you bought and sold your shares.
- The total “Recognized Loss” amount calculated for your specific transactions.
Because the total losses claimed by all investors often exceed the amount available in the settlement fund, payments are typically distributed on a pro-rata basis. This means you will likely receive a percentage of your total recognized loss rather than the full amount.
The Importance of Staying Informed
Securities class actions can be complex and often take years to reach a resolution. For many investors, the most difficult part is the waiting period between filing a claim and receiving a check. Once the claim deadline passes, the administrator must review every single submission for accuracy and resolve any discrepancies. This process can take several months or even over a year.
To stay informed, you should keep copies of everything you submit. If you move or change your contact information after filing a claim, be sure to notify the claims administrator so they can reach you when it is time to distribute the funds. Most settlement websites provide a way to check the status of your claim or contact a representative with specific questions.
Conclusion
The ExxonMobil securities settlement represents a significant opportunity for affected investors to recover a portion of their financial losses. By following the required steps—gathering your records, completing the claim form accurately, and submitting it before the deadline—you can ensure that your rights are protected. While the legal process is slow, taking action now is the only way to participate in the distribution of the settlement fund. If you found this guide helpful, consider exploring our other articles on investor rights, financial recovery, and navigating legal settlements to stay informed about your financial well-being.