According to InsideClimate News, the office of New York State Attorney General Eric Schneiderman had been investigating ExxonMobil for a year before it issued a recent subpoena for “documents on what Exxon knew about climate change and what it told shareholders and the public.” The subpoena compelled ExxonMobil to hand over scientific research and communications about climate change dating back to 1977. (Exxon and Mobil merged to become a single corporation in 1999.) The investigation is based on New York State’s consumer-protection and general-business laws and, crucially, the state’s Martin Act, InsideClimate News reported. That statute prohibits fraud or misrepresentation in the sale of securities and commodities, and gives the Attorney General extraordinary power to fight financial fraud.
Exxon had no duty to share with the public the information it gathered about climate change starting almost forty years ago, but it was forbidden to deceive shareholders and potential buyers of its shares. Earlier this fall, InsideClimate News and the Los Angeles Times reported that Exxon scientists warned executives about the potential environmental catastrophe from the use of fossil fuels, and that, even so, the company deliberately spread doubt about that scientific view. In cases like this, the Martin Act is a particularly potent tool because the state must prove only misrepresentation, omission of a material fact, or other conduct that deceives or misleads the public. It doesn’t require the Attorney General’s office to show proof of intent to defraud or proof that anyone was defrauded.
Members of Congress, environmentalists, and academics have been calling for a state or federal investigation since before the story broke about the company’s far-reaching research. Back in May, Senator Sheldon