Police pension system sues Denver-based company over losing investment
DENVER — Oklahoma’s 8,000-member police pension system, which invested in an energy company, is alleging the business deceived investors and the value of the system’s investment fell by 20 percent.
The allegation is in a 13-page lawsuit the Oklahoma Police Pension and Retirement System filed against Denver-based Jagged Peak Energy Inc.
The lawsuit, filed Monday in federal court in Denver, claims the alleged deception violates the Securities Act.
The lawsuit does not state how many shares of Jagged the system bought in an initial public offering in January, but says the company sold 31,599,334 shares at $15 per share.
The lawsuit alleges representations in a registration statement for the offering “were materially untrue, inaccurate, misleading, and/or incomplete.”
The pension system states it was damaged and seeks an unspecified amount of money from the defendants as compensation. The lawsuit asserts that the price per share fell to $12.01 by May 11, when Jagged announced first quarter 2017 financial and
operating results.
The Oklahoman did not receive a response from either Jagged or the system to inquiries about the dispute.
The system is asking a judge to designate the lawsuit as a class action on behalf of purchasers of shares traceable to the offering.
The lawsuit states the company focuses on the acquisition and development of unconventional oil and associated natural gas reserves in the Delaware Basin, a sub-basin of the Permian Basin of West Texas.
The lawsuit alleges the company “failed to disclose issues concerning the positioning of its acreage in the Delaware Basin,” including “significant risk that its wells would produce less than other wells in the Southern Delaware Basin.”
The issues were “known, but undisclosed,” according the lawsuit.
Also named as defendants are Jagged executives and directors, as well as investment banking companies that underwrote the stock offering. The lawsuit alleges underwriters “met with potential investors and presented highly favorable, but materially incorrect and/or materially misleading, information about the company.”