One has to imagine that these are busy times inside the legal department at Chevron. Lawyers at big oil companies are rarely lacking for work on a day-to-day basis, but at the moment, the second-largest U.S. oil company is dealing with a judgment of over $18 billion levied against the company by an Ecuadorean court, a case that I noted last month is not short on melodrama or annoyances for Chevron. For my full outlook on the Ecuadorean case, it is available (HERE).
That is a hefty judgment and one that Chevron is right to contend, though the outcome of all the legal maneuvering is far from known at this juncture. In the meantime, California-based Chevron has a far smaller and perhaps even more absurd suit to deal with and if you have been following the Ecuador case, it is fair to say that one is tough to top in terms of absurdity.
File this one under ''Stock Market Humor'' because that is exactly what it is. A Michigan man is suing Chevron and the company's stock transfer agent, Bank of New York Mellon, for $250,000 after his $100,000 investment in Chevron (CVX) shares was deducted from his bank account but never executed as a buy order.
Obviously, there are two different numbers in that last paragraph. The second is the investment Perry Christy, a former Detroit area lawyer, wanted to make in Chevron in 2004. The first, $250,000, is what that investment would be worth today when accounting for capital appreciation and reinvested dividends. In other words, Mr. Christy wants a do-over of epic proportions.
First, Mr. Christy deserves at least a little bit of credit for spotting a good deal, which Chevron would certainly have qualified as during the early part of 2004 when it was trading in the $40s. That would be a good example of foresight. For reasons he deems unsatisfactory, the money was deducted from his bank account, but never made it to an actual buy order for Chevron stock.
That is some tough luck to be sure and of course it makes the casual observer wonder why Christy was not making a bigger deal about the failed stock purchase sometime before 2011. The Associated Press reports the statute of limitations on the case is about to run out and that may well be one reason why we are just now hearing about this suit. Or maybe he wanted the benefit of hindsight, which waiting seven years would certainly afford him. Plus, waiting seven years instead of say three or four allowed more time to put the beauty of reinvested dividends to work.
Just one day removed from celebrating Independence Day, we ought to be thankful that we live in a country that has a sophisticated legal system that allows for even absurd cases to have at least some shot at being heard. I am not a lawyer, but I imagine asking for shares of any stock today when it has doubled over the past seven years is a pretty tough case to win. The patriot in me finds some comfort in knowing I could at least try.
Patriotic feelings aside, perhaps the really big question that needs to be asked in this case is not why anyone would wait seven years to make this claim, but rather would the individual in question really have held Chevron stock when it crashed from $101 to $58 from May through October 2008? And does the investor in question even realize that Chevron's stock is up roughly $4 from its May 2008 peak through today? I hope Court TV picks this one up.