Class Action Securities Fraud Filed against Sable for Restart Claim
Two law firms filed securities class action lawsuits against Sable Offshore Corp., alleging that the company misled investors about the restart of oil production at the Santa Ynez Unit. The suit, announced on July 30, 2025, claims that Sable Offshore stated that it had resumed oil production in the Santa Ynez Unit, when it had only begun testing. The class action represents investors who bought securities between May 19, 2025 and June 3, 2025.
The lawsuits allege that the company misled investors to inflate its stock price before a major secondary offering. The suit claims that Sable’s announcement on May 19, 2025 that it restarted oil production in the Santa Ynez Unit increased its stock value by 12.5% in a day. The company then raised $295 million through a secondary stock offering on May 21, 2025.
Then, on May 23, 2025, the California State Land Commission sent Sable a letter stating that the “press release appears to mischaracterize the nature of recent activities, causing significant public confusion and raising questions regarding Sable’s intentions.” The letter clarified that the oil from the Santa Ynez Unit was from well-testing procedures and not a “resumption of commercial production or a full restart” of the Santa Ynez Unit. “Characterizing testing activities as a restart of operations is not only misleading but also highly inappropriate — particularly given that Sable has not obtained the necessary regulatory approvals to fully resume operations at SYU,” the Lands Commission wrote.
The Lands Commission letter was not made publicly available until May 28, 2025. After the release of the letter, Sable’s stock dropped by more than 15%, according to the lawsuit.
Following the Lands Commission letter, two courts issued rulings to stop Sable from restarting the pipeline. On May 28, 2025, a Superior Court judge in Santa Barbara issued a preliminary injunction to stop Sable from repairs on the pipeline. On June 3, 2025, in a separate case, a different Superior Court judge in Santa Barbara issued a temporary restraining order against the Office of the State Fire Marshal and Sable, aimed at blocking a waiver from the state fire marshal that allowed Sable to restart the pipeline.
Sable Offshore’s stock price fell further after these announcements, according to the lawsuit.
The class action case, Johnson v. Sable Offshore Corp., et al., is in the U.S. District Court for the Central District of California.