Shareholders of Faith-based Oil Company Drop Class Action

A group of investors in Dallas-based Zion Oil & Gas has dropped a federal class action lawsuit that alleged the faith-based company committed securities fraud by misleading investors about a U.S. Securities and Exchange Commission investigation of the company, making false statements about its exploration activities in Israel and even paying a Christian minister to promote the company’s stock.

The development follows a March 3 ruling issued by U.S. District Judge Brantley Starr of the Northern District of Texas that granted Zion’s motion to dismiss, the judge’s first decision in a securities class action case since taking the bench last year. As is standard in securities litigation, Judge Starr gave the plaintiffs the opportunity to re-plead their claims, but when the 28-day deadline approached, they decided to drop their case instead.