A legal expert in financial law said the Democrat-lead probe targeting ExxonMobil is likely illegal and a ruse to paint those investigating the company as champions “in the fight against global warming.”
The Exxon subpoena into the company’s knowledge about internal climate change reports is an abuse of extraordinary powers. It allowed attorneys general (AGs) to subpoena private documents without either obtaining a court order or filing a complaint, Merritt Fox, a professor of law at Columbia Law School, wrote Monday at National Law Journal.
Fox was referencing New York Attorney General Eric Schneiderman’s investigation into Exxon, which, according to a New York Times report, demanded “extensive financial records, emails and other documents” from the oil producer dating all the way back to the 1970s. The New York attorney general also demanded information on global warming skeptic groups Exxon had once helped fund.
Schneiderman argued the oil company hid internal knowledge about the effects climate change has on oil production from investors to justify his investigation. He used a little-known financial and securities law to justify his investigation.
Fox argued that the Martin Act, which allows the AG to investigate and eventually prosecute companies for committing fraud, requires the likelihood that a reasonable investor would consider the omitted important information and decided “not to vote or buy, sell, or hold, and that it has to significantly alter a total mix of information available to this reasonable man or reasonable investor.”