BHP Billiton investors sue in U.S. over Brazil dam disaster

By Jonathan Stempel
NEW YORK, Feb 24 (Reuters) - BHP Billiton Ltd BHP.AX
BLT.L was sued in the United States by investors who accused
the Anglo-Australian mining company of fraudulently overstating
its ability to manage safety risks prior to November's fatal dam
burst at a Brazilian mine it co-owned and operated.
In a complaint filed on Wednesday in the U.S. District Court
in Manhattan, investors led by the Jackson County Employees'
Retirement System in Michigan said BHP inflated the price of its
American depositary receipts by ignoring safety risks and
overstating its commitment to safety before the disaster.
Four BHP officials were also sued, including Chief Executive
Andrew Mackenzie and Chairman Jac Nasser.
Wednesday's lawsuit follows the Nov. 5, 2015 dam burst in
Minas Gerais, Brazil's main mining state, at the mine run by
Samarco, a joint venture between BHP and Brazil's Vale SA
VALE5.SA .
The burst unleashed huge quantities of mud and waste that
destroyed a nearby village and killed at least 17 people, in
Brazil's worst environmental disaster.
On Nov. 30, Brazil sued BHP and Vale for 20 billion reals
(US$5.05 billion) of damages.
The price of BHP's ADRs closed that day 20 percent below
where they traded before the dam burst, and the complaint said
BHP should compensate ADR investors for that decline.
"Defendants knew or recklessly disregarded the precarious
condition of the Fundão dam and Samarco's tailings facilities,"
causing harm to investors when the truth came out, it said.
A spokesman for BHP had no immediate comment.
The lawsuit seeks class action status for ADR investors
between Sept. 25, 2014, when BHP touted its focus on safety in a
U.S. regulatory filing, and Nov. 30, 2015, when Brazil sued.
On Tuesday, Brazilian police accused six Samarco officials
and one contractor of murder in connection with the dam burst.
Samarco called such accusations "misguided."
The law firm Robbins Geller Rudman & Dowd, which specializes
in securities fraud lawsuits, filed Wednesday's complaint. Vale
was not named as a defendant.
The case is Jackson County Employees' Retirement System v.
BHP Billiton Ltd et al, U.S. District Court, Southern District
of New York, No. 16-01445.