A New York law firm filed a class action lawsuit against Brazil’s Petrobras on behalf of shareholders Monday, claiming the state owned company violated anti-fraud provisions of the Securities Exchange Act.
The suit, filed by Wolf Popper, claims Petrobras issued false and misleading statements to investors by failing to disclose “a culture of corruption that consisted of a multi-billion dollar money laundering and bribery scheme” beginning in 2006.
The suit also alleges Petrobras overstated its property, plant and equipment line item on its balance sheet by inflating the value of its construction contracts so the overstated amounts could be carried as assets on its balance sheet.
U.S.-traded shares in Petrobras have tumbled from $19.38 per share in September 2014 to $8.23 at the closing bell Monday.
Petrobras told Forbes Monday it had not seen the lawsuit.
Last week, 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 said Tuesday he expects the company’s management to be replaced as the investigation continues.
Brazilian prosecutors are expected to visit the U.S. Securities and Exchange Commission and the Department of Justice in January to help determine if U.S investors were harmed by the alleged corruption, Reuters said.
Petrobras was served with a subpoena from the U.S. Securities and Exchange Committee late last month requesting unspecified documents.
The SEC has not disclosed details about its request.
Petrobras’ recent legal woes come amid an ongoing police investigation into alleged money laundering, bribery and kick backs at the company.
Earlier this year, former downstream executive Paulo Roberto Costa was arrested on corruption charges and later admitted to taking a $636,000 bribe tied to the company’s 2006 purchase of a Texas refinery.
Costa alleges executives were skimming as much as 3 percent off the price of contracts and giving the money to political organizations, including campaigns run by transportation chief Sergio Machado.