Brazilian oil and gas company, Petrobras, has signed an agreement to settle a securities class action lawsuit filed in the US in which the lead plaintiff was UK pension fund, the Universities Superannuation Scheme (USS).

Under the settlement, Petrobras agreed to pay US$ 2.95 billion to resolve claims in two installments of US$983 million and a last installment of US$984 million. USS said this represented the largest securities class action settlement in a decade. It was also the largest settlement ever in a class action involving a non-US issuer and is the fifth largest class action settlement ever achieved in the United States, USS said.

USS said it had acted as lead plaintiff in the securities class action and was one of the two classes of plaintiffs which were certified in an order by the district court issued on 2 February 2016. Whilst USS acted as class representative for the Exchange Act class, North Carolina Department of State Treasurer and Employees' Retirement System of the State of Hawaii were appointed as class representatives for the Securities Act class.

Petrobras said the agreement did not constitute any admission of wrongdoing or misconduct by Petrobras and in it,  the company expressly denied liability. The class action was a result of the revelations that emerged from a major corruption scandal in Brazil and the resulting criminal investigation which has been dubbed Operation Car Wash (or the Portuguese, Lavo Jato). This began with allegations of kickbacks at Petrobras, which snowballed into a corporate crisis for many of the country’s biggest companies, a political crisis and damaged the entire Brazilian economy.

BThe oil company said the agreement reflected its status as a victim of the acts uncovered by Operation Car Wash, as recognised by Brazilian authorities including the Brazilian Supreme Court.  As a victim of the scheme, Petrobras said it had already recovered R$1.475 billion in restitution in Brazil and would continue to pursue all available legal remedies from culpable companies and individuals.

USS said it has also reached an agreement with the related entity, the Petrobras International Finance Company, as well as certain of Petrobras’ former executives and directors. Claims against Petrobras’ auditor, PricewaterhouseCoopers Auditores Independentes were still pending, USS said.

Jeremy Hill, Group General Counsel at USS, said: “We have led this securities class action diligently and intensively, and we welcome this important step in the litigation process for the class. We are pleased with the settlement agreement which has been reached and which we believe is in the best interests of the class.”