Energy Transfer LP Class Action Lawsuit
- Company Name
- Energy Transfer LP
- Stock Symbol
- Class Period
- February 25, 2017 to November 11, 2019
- Northern District of Texas
On November 20, 2019, the Energy Transfer LP class action lawsuit was filed charging Energy Transfer and certain of its officers with violations of the Securities Exchange Act of 1934. The Energy Transfer class action lawsuit was commenced in the Northern District of Texas on behalf of purchasers of Energy Transfer securities between February 25, 2017 and November 11, 2019 (the “Class Period”) and is captioned Reinhardt v. Energy Transfer LP, et al., No. 19-cv-02771.
Energy Transfer provides energy-related services in the United States and China. Energy Transfer owns and operates approximately 9,400 miles of natural gas transportation pipelines and three natural gas storage facilities in Texas and approximately 12,200 miles of interstate natural gas pipelines.
Energy Transfer’s projects include the Mariner East pipeline, a multi-billion dollar pipeline project to carry highly volatile natural gas liquids (“NGLs”) across Pennsylvania. According to Energy Transfer’s U.S. Securities and Exchange Commission filings, the Mariner East pipeline transports NGLs from the Marcellus and Utica Shale areas in Western Pennsylvania, West Virginia and Eastern Ohio to destinations in Pennsylvania, including Energy Transfer’s Marcus Hook Industrial Complex on the Delaware River, where they are processed, stored and distributed to local, domestic and waterborne markets. On February 13, 2017, the Pennsylvania Department of Environmental Protection approved water-crossing and sedimentation permits for the Mariner East 2 pipeline, which would transport NGLs across Pennsylvania to a terminal at Marcus Hook. According to news sources, the permits were believed to be the final regulatory hurdle to begin construction of the pipeline.
The Energy Transfer class action lawsuit alleges that throughout the Class Period, defendants made materially false and misleading statements regarding Energy Transfer’s business and operations. Specifically, defendants failed to disclose that Energy Transfer’s permits to conduct the Mariner East pipeline project in Pennsylvania were secured via bribery and/or other improper conduct, which would increase the risk that Energy Transfer and/or certain of its employees would be subject to government and/or regulatory action. As a result of this information being withheld from the market, Energy Transfer units traded at artificially inflated prices of more than $19 per share during the Class Period.
Then on November 12, 2019, the Associated Press reported that Energy Transfer’s Mariner East pipeline project was under investigation by the Federal Bureau of Investigation (“FBI”). Citing interviews with current and former state employees, Associated Press reported that the FBI’s investigation “involves the permitting of the pipeline, whether [Pennsylvania Governor Tom] Wolf and his administration forced environmental protection staff to approve construction permits and whether Wolf or his administration received anything in return.” On this news, Energy Transfer’s unit price fell $0.81 per share, or nearly 7%, over the following two trading sessions, to close at $11.16 per share on November 13, 2019.
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