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Report: Providence, Rhode Island sues Petrobras for graft-related bond losses

The city of Providence, Rhode Island is reportedly suing Brazil’s Petrobras and CEO Maria das Gracas Silva Foster for bond losses tied to alleged corruption.

The suit, filed on December 24 in New York, alleges state-owned Petrobras made misleading statements to investors and inflated the price of assets to carry out kickback schemes, Brazilian newspaper O Estado do S. Paulo said.

The city is seeking an undisclosed amount of damages for bonds purchased between 2010 and 2014.

Providence claims Petrobras issued about $98 billion in debt and stocks overseas during that four year period.
CEO Maria das Graças Silva Foster and several other executives were reportedly named as defendants in the suit.

Petrobras told Reuters the company has not received a notification about the lawsuit.

Several investor groups have filed suits against Petrobras this year making similar claims.

Earlier this month, New York firm Wolf Popper filed a class action lawsuit against the company, claiming it issued false and misleading statements to investors.

The Wolf Popper suit also claims the company failed to disclose “a culture of corruption that consisted of a multi-billion dollar money laundering and bribery scheme” beginning in 2006.

Earlier this month, Brazilian investment firm Grandiflorum Participacoes won a $1.2 billion lawsuit against Petrobras.

Grandiflorum Participacoes claimed Petrobras artificially lowered gas prices, causing the firm to lose upwards of $1 billion at its Rio de Janeiro refinery.

Brazil’s top federal prosecutor has said he expects the company’s management to be replaced as the corruption probe continues.

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Nicolas Torres is a staff writer for Petro Global News, where a version of this post first appeared.

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