How to Defend against Lawsuit Reco has to prove that they actually found commercial oil at 6-2 and 6-1 strat wells. They are unwilling or unable to provide missing drilling data such as wire-log, mudd logs, flow tests, API oil gravity etc. to confirm that those two wells, now plugged, were not dusters and dry holes. According to Sproule, the billions of barrels of oil-in-place are based on legacy data of unproven unconventional shale oil and gas. Unconventional resources are worthless and could not be extracted in Namibia.
Reco is accused of pumping up the stock with misrepresentations to draw in unsophisticated investors. Under SEC and IIROC reg., it is tantamount to perpetuating a fraud on the market.
In order to successfully defend themselves against alleged "the lie" they need to show "the goods".