Shareholder Protection or War on Coal?
Marlo Lewis, Jr. is a senior fellow in energy and environment at the Competitive Enterprise Institute.
Did New York Attorney General Eric Schneiderman investigate Peabody Energy to protect shareholders against "misrepresentation" of climate-related shareholder risks? No. Schneiderman's investigation is part of the broader political campaign against fossil fuels. While it goes by various names - "war on coal," "divestment," "keep it in the ground," or "climate action" - the goal is clear: suppress the production and use of energy from coal, gas, and oil.
Schneiderman investigated Peabody under New York's Martin Act, a securities-fraud statute with a low bar for establishing guilt. To convict, the prosecutor need not prove intent to defraud, shareholder injury, or even that the company made false statements. Rather, he only has to show that the company omitted "material" facts in shareholder communications.
In his settlement agreement with Peabody, Schneiderman faults the company for: