In a stunning capitulation, Petrobras settled with U.S. investors for nearly $3bn in a class-action lawsuit as follow-on litigation to the long-standing corruption allegations against the company. The litigation involved one of the largest securities class actions pending in the United States in which Petrobras was accused of concealing a sprawling, decades-long kickback scheme from investors. It is the fifth largest securities class-action settlement of all time. Kevin LaCroix, an attorney who advises companies on directors’ and officers’ liability insurance, noted that “While there have been larger settlements and there have been comparable settlements, the Petrobras settlement is unique in one respect, in that it is the largest settlement of a securities lawsuit filed as a follow-on to bribery or corruption allegations.”

While there have been larger bribery and corruption scandals across the globe, such as the Siemens matter, resolved in 2008 for $1.6bn globally, the Petrobras scandal has led the globe in ramifications and fallout. The initial investigation, Operation Car Wash, led to the two largest global anti-corruption enforcement actions ever, Odebrecht and JBF, the fall of the former Brazilian President Dilma, and numerous other anti-bribery enforcement actions across the globe.

Petrobras had fought the lawsuit tooth and nail, attempting to have the trial court dismiss it and then when failing to do so, appealing unsuccessfully to the Second Circuit Court of Appeals. The company had also appealed to the U.S. Supreme Court, which had scheduled oral arguments later this year on the case. Now of course, these arguments are moot.

It will be interesting to see if this case presages a renewed focus on follow-on class action, securities lawsuits for companies that engage in systemic bribery and corruption. The amount of the settlement is stunning, as the next highest settlement amount for this type of claim was the $62 million paid by Avon. While this case may not portend $$billion+ settlements going forward, it probably does guarantee which lawsuits will always be brought against public companies that find themselves accused of engaging in bribery and corruption.