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ExxonMobil to face trial in New York investor fraud lawsuit

US supermajor says Attorney General's allegations over climate change are 'false'

ExxonMobil will on Tuesday face trial in a lawsuit by New York's attorney general accusing it of misleading investors about the risks of climate change regulations to its business.

The trial, expected to begin before Justice Barry Ostrager in Manhattan Supreme Court and last up to three weeks, could feature testimony from Rex Tillerson, who was ExxonMobil's chief executive before serving as US Secretary of State.

It is the first of several lawsuits currently pending against major oil companies related to climate change to go to trial.

"The New York Attorney General's allegations are false," ExxonMobil said in a statement.

"We tell investors through regular disclosures how the company accounts for risks associated with climate change. We are confident in the facts and look forward to seeing our company exonerated in court."

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The New York attorney general's office had no immediate comment on Monday.

The attorney general sued ExxonMobil in October 2018 under the Martin Act, a New York state law that had been used primarily to go after financial fraud.

The lawsuit claimed ExxonMobil falsely told investors it had properly evaluated the impact of future climate regulations on its business using a "proxy cost" for the likely effects of future events on its business.

However, these proxy figures frequently were not used in its internal planning or cost assumptions, according to the lawsuit.

The attorney general also accused the company of failing to account properly for the costs of potential regulation in determining the value of its oil and gas reserves, or whether to write down the value of its assets.

Massachusetts is separately investigating whether ExxonMobil concealed its knowledge of the role fossil fuels play in climate change.

New York sues ExxonMobil on climate issue

Both Massachusetts and New York began investigating ExxonMobil after news reports in 2015 saying its own scientists had determined that fossil fuel combustion must be reduced to mitigate the impact of climate change.

Those reports, by InsideClimate News and the Los Angeles Times, were based on documents from the 1970s and 1980s. ExxonMobil said the documents were not inconsistent with its public positions.

ExxonMobil and other oil companies including BP, Chevron and Shell face lawsuits by cities and counties across the US seeking funds to pay for seawalls and other infrastructure to guard against rising sea levels brought on by climate change.

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