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(CNN) —  

For years ExxonMobil duped shareholders about the serious threat its fossil fuels empire faces from the global crackdown on carbon emissions, according to a lawsuit filed on Wednesday by the New York Attorney General.

The lawsuit alleges that Exxon executed a “longstanding fraudulent scheme” that misled investors by providing “materially false” statements on the oil company’s exposure to climate change regulations.

“Exxon’s fraud was sanctioned at the highest levels of the company,” including by former CEO Rex Tillerson, the lawsuit said.

Tillerson, who later became the US secretary of state under President Donald Trump, allegedly knew for years about the misrepresentations, the lawsuit said.

“Exxon built a facade to deceive investors into believing that the company was managing the risks of climate change regulation to its business,” New York Attorney General Barbara Underwood said in a statement.

“In fact, it was intentionally and systematically underestimating or ignoring them, contrary to its public representations,” she said.

Exxon has long tried to reassure investors nervous about the consequences of climate change regulation by saying it applied a “proxy cost” of carbon to its investment decisions, estimates of oil and gas reserves and other matters.

However, the lawsuit alleges that Exxon often quietly used much lower proxy costs or none at all.

Understating the cost of carbon regulation would allow an oil company to avoid taking painful writedowns and allay fears that oil and gas assets will become “stranded” by costly regulation.

For example, the lawsuit said Exxon did not apply the proxy cost to 14 oil sands projects in Alberta, Canada, resulting in the understatement of costs by about $25 billion. Exxon’s own planners found that applying a proxy cost consistent with Exxon’s public representations would have shortened one project’s estimated economic life by 28 years and reduced expected revenue by billions of dollars, the lawsuit said.

Tillerson “knew for years” that Exxon’s statements to shareholders on these proxy costs were “misleading,” the lawsuit said.

Tillerson was not reached for comment.

In a statement, Exxon slammed the New York Attorney General’s “tainted, meritless investigation” and said it will seek to get the lawsuit dismissed.

“These baseless allegations are a product of closed-door lobbying by special interests, political opportunism and the attorney general’s inability to admit that a three-year investigation has uncovered no wrongdoing,” Exxon said.

The lawsuit comes just months after the Securities and Exchange Commission dropped its own probe into whether Exxon misled investors about climate change and the potential effects on its business.

Climate activists cheered the aggressive action from New York officials.

“Big oil may finally face some consequences for its role in wrecking the climate,” Bill McKibben, a climate activists and founder of 350.org, said in a statement.

McKibben credited Underwood for “standing up for investors who may have been swindled, and indirectly the 7 billion of us who will suffer from Exxon’s lies.”