IFM Investors has been named in a class action regarding the Colonial Pipeline, which the industry fund investment house acquired in 2007 as part of a consortium.
The class action was filed in the United States District Court in the Northern District of Georgia with Ramon Dickerson as the lead plaintiff.
Along with IFM, CDPQ Colonial Partners, KKR-Keats Pipeline Investors, Koch Capital Investments, Shell Midstream Operating were also named as defendants - with the entities collectively doing business as the Colonial Pipeline Company.
The Colonial Pipeline supplies the east coast of the US with petroleum and is a critical piece of infrastructure, transporting around 2.5 million barrels of gasoline, diesel fuel, heating oil and jet fuel per day.
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On 7 May 2021, a ransomware cyber attack shut down the Colonial Pipeline. The entire east coast of the US was deprived of its normal supply of petroleum.
To secure the pipeline, US$4.4 million worth of bitcoin was paid to a hacking group which the Federal Bureau of Investigations named Darkside.
The class action claims that Colonial Pipeline Company failed to properly secure the infrastructure and left itself open to potential ransomware attacks.
"The defendant's unlawfully deficient data security has injured millions of consumers in the form of higher gas prices, and gasoline shortages that exist/existed, due to Colonial's decision to effectively turn off the pipeline," the action alleges.
While the pipeline supplies whole airports with jet fuel, the lead plaintiff in this case is a consumer who paid more for petrol as a result of the shutdown than he otherwise would have.
Ramon Dickerson purchased petrol on May 7, May 8, May 9 and May 10 in Fayetteville and Greensboro, North Carolina. Each of these purchases were inflated as a result of the shutdown of the pipeline, the action alleges.
"For the first time in six years, the average price of a gallon of gasoline in the United States exceeded [US]$3 - and this was due to the defendant's failure to adequately protect their IT systems and then shut down the Colonial Pipeline," the action claims.
IFM Investors was contacted for comment.