Hydrofracking risk: Not just for energy companies anymore
As previously noted, hydrofracking carries business risk for many companies, even those without direct links to the energy industry.
February 08, 2012 at 04:00 AM
7 minute read
The original version of this story was published on Law.com
As previously noted, hydrofracking carries business risk for many companies, even those without direct links to the energy industry. Insurance carriers, for example, may see claims rise against a number of types of policies. Yet, this is not the only sector that could be open to liability from hydrofracking. Consider the following, for example.
Securities Violations: Investors, brokers and energy companies themselves may face liability stemming from corporate statements made about the benefits and risks of hydrofracking. At least one state attorney general—Eric T. Schneiderman in New York—is looking closely at the research done by hydrofracking companies and the information they possess about risks and benefits. To some extent, this is about possible environmental risk, but it's likely Schneiderman may believe that companies were either underselling the risk of hydrofracking, overselling the benefits or both to investors in order to raise funds to finance operations. If this is the case, then investors and brokers stand to lose, and the companies themselves could face securities fraud investigations and charges.
Banking Sector: Hydrofracking risk could bring further complications for the banking industry at a time when it is still fragile from the economic downturn of 2008. This is especially the case for mortgage banks that handle farm properties.
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