Case Details

Type of Claim: Section 90 FSMA claim

Claim Period: 11 May 2011 to 17 June 2011 for Glencore IPO shares; 30 April 2013 for holdings of Xstrata shares

Defendants: Glencore Plc

Jurisdiction: England

Governing Law: English law

Limitation: 28 September 2022

 

Case Summary

On 15 February 2022 Glencore announced its Preliminary Results and stated that it had taken a $1.5bn charge as its best estimate of the cost of settling its regulatory investigations with the US, UK and Brazilian authorities. Additionally, it stated that it expected to settle those investigations in this calendar year.

On 24 May 2022 Glencore announced it had reached coordinated resolutions with US, UK and Brazilian Authorities:

Under the terms of the US resolutions, Glencore will pay penalties of $700,706,965 to resolve bribery investigations and $485,638,885 to resolve market manipulation investigations by the Department of Justice (“DOJ”) and the Commodity Futures Trading Commission (“CFTC”). Of this amount, up to $165,930,959 will be credited against other, parallel matters, including in the UK, so that the net amount payable to the US authorities is expected to be $1,020,414,891. Glencore has further agreed to pay $39,598,367 under a resolution signed with the Brazilian Federal Prosecutor’s Office (“MPF”) in connection with its bribery investigation into the Group.

Glencore Energy UK Limited also indicated that it will plead guilty to charges brought by the UK Serious Fraud Office (“SFO”) in respect of its bribery investigation. The penalty to be paid will be determined following a sentencing hearing currently scheduled for 21 June 2022.

Glencore does not currently anticipate that the amount to be paid in respect of the UK resolution will result in the aggregate amount being paid for all of the above resolutions differing materially from the $1,500 million provision recorded in the Company’s 2021 financial statements.

Stewarts have sought limitation advice from counsel, reaching the conclusion that the limitation period would have started to run when plaintiffs had sufficient knowledge to plead a claim against Glencore with the following dates being relevant:

  • On balance a court would likely find that plaintiffs had imputed knowledge from the date of the press announcements that the UK Serious Fraud Office (SFO) were investigating Glencore, i.e. 18 May 2018;
  • However, there is a material risk that a court may decide that the “gist of the cause of action that is asserted” was pleadable by the plaintiffs from 29 September 2016 (the date of the Och-Ziff settlement agreement with the DOJ);
  • A low risk that a court may decide that plaintiffs had imputed knowledge from 16 May 2014 when Global Witness published its report: “Glencore and the Gatekeeper.”

Stewarts’ view, given counsel’s advice, is that potential plaintiffs should take a prudent approach and file any claim before 29 September 2022.

It is Stewarts’ intention to bring s.90 FSMA claims against Glencore on behalf of institutional investors.

 


 

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