Pacific Coast Oil Trust Case Summary

A lawsuit has been filed on behalf of all people who purchased or acquired Pacific Coast Oil Trust (PCOT) securities that became effective on May 2, 2012 and September 19, 2013. It is alleged that PCOT violated federal securities laws in its disclosures. The disclosures issued are believed to misrepresent its business, operations, and prospects. More specifically, it is claimed that the statements are misleading regarding PCOT’s capital expenditures and hedge contracts (Faruqi & Faruqi, LLP).
PCOT announced its Secondary offering on September 18, 2013. Then on September 24, 2013 PCOT revealed its October 2013 cash distribution. The issue arises because the October 2013 distributions significantly declined compared to previous distributions. The distributions declined because of increased capital expenditures and lower-than-average realized oil prices. None of this was made known to the public prior to the Second Offering in the Secondary Registration Statement. These material facts failed to be disclosed, which is in violation of Item 303 of Regulation S-K (Stanford Law School). Because of the decline in October 2013 distributions the shares declined from the Secondary Offering price of $17.10 per share to approximately …show more content…
Both entities have no employees, executive officers, or directors. Further, the Board of Representatives of Pacific Coast Energy Holdings (PCEH) manages PCEC. At the time of the offerings, Halbert S. Washburn and Randall H. Breitenbach were Board Representatives of PCEH. Washburn and Breitenbach signed the false and misleading Registration Statement (Latham & Watkins, LLP). There were also several underwriter banks that are liable for the false and misleading statements because of their failure to conduct an adequate due diligence investigation. It is believed that the underwriter banks either knew or should have known of the existing problems, misstatements, and