Jagged Peak Energy v. Oklahoma Police Pension
Annotate this CaseThe question this case presented for the Colorado Supreme Court's review centered on whether the court of appeals misapplied federal case law when it concluded that respondent Oklahoma Police Pension and Retirement System (“Oklahoma”) stated a plausible claim for relief under sections 11, 12(a)(2), and 15 of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 77k, 77l(a)(2), 77o, notwithstanding petitioners’ assertions that the alleged misrepresentations at issue constituted immaterial “puffery” and amounted to claims based on hindsight, which were not actionable under federal law. Jagged Peak Energy Inc. (“Jagged”) was a Denver-based company that specializes in the exploration, development, and production of crude oil and natural gas. In January 2017, Jagged conducted an initial public offering (“IPO”), during which it sold over 31 million shares at a price to the public of $15.00 per share. Oklahoma, a governmental pension system that provides pension and disability benefits for municipal police officers in the state of Oklahoma, purchased Jagged shares “pursuant to and/or traceable to the [IPO].” According to Oklahoma, within a short time after its investment, facts came to light indicating that Jagged, the individual defendants, and the underwriter defendants (collectively, “defendants”) had negligently overstated Jagged’s ability to increase its oil and gas production. As a result, the price of Jagged shares saw several notable declines, and except for a brief surge, Jagged’s stock has traded well below its IPO price. Oklahoma filed a class action lawsuit in Denver District Court, alleging that defendants had made materially untrue statements and omissions in their offering documents. The Colorado Supreme Court concluded the appellate court's conclusion was consistent with applicable federal precedent, and therefore affirmed that court's judgment.
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