Lehman Climate Policy Based on Erroneous Information Says Free Enterprise
Action Fund (Ticker: FEAOX)
WASHINGTON, Feb. 6 /PRNewswire-USNewswire/ -- The U.S. Securities and Exchange
Commission denied a bid by Lehman Brothers to block shareholders from voting
on a global warming-related shareholder proposal from the Free Enterprise
Action Fund (Ticker: FEAOX).
- "Lehman Brothers says it wants to make money from global warming, but basic information on which the firm relies and presents to shareholders is
- clearly erroneous," said Steve Milloy, portfolio manager of Action Fund Management...
"When a $34 billion company is touting misinformation as a basis for its
actions, it makes you wonder about the soundness of its business plan," Milloy
- Lehman Brothers' management uses the so-called "hockey stick" chart, for example, to support the notion that "the Earth's mean temperature has risen sharply in recent decades."(1)
But the hockey stick graph was scientifically discredited long before Lehman
issued its February 2007 report.(2)
- "As shareholders, we expect that management will undertake reasonable due diligence before undertaking action with corporate assets," said AFM's Tom Borelli. "Corporate action and statements based on erroneous information may
not be 'sustainable' for shareholders or the environment," Borelli added.
- "Lehman Brothers should also be concerned about potential legal liability for false and misleading statements," said Milloy.
Based on the 2003 California case of Nike v. Kasky, citizens may sue
businesses over false or misleading statements.(3) The California Supreme
Court ruled that statements made on company websites are considered commercial
speech and therefore subjected to legal challenge.
"We think that Lehman is in way over its head when it comes to global warming
and that management is recklessly risking shareholder value," said Milloy.
"Shareholders will be looking for an explanation from CEO Richard Fuld at the
annual shareholders meeting."...
1. See Lehman's "The Business of Climate Change: Challenges and
Opportunities," p.6 (February 2007).
2. See e.g., U.S. Senate Committee on Environment and Public Works, "Inhofe
Says NAS Report Reaffirms 'Hockey Stick' Is Broken" (June 22, 2006),
3. Kasky v. Nike, Inc., 27 Cal.4th 939, 947, 45 P.3d 243, 248, 119 Cal.Rptr.2d
296, 302 (Cal. 2002)