HOUSTON (Reuters)—A U.S. federal judge dismissed a large part of a nationwide lawsuit accusing BP P.L.C. and top executives of fraud for misleading shareholders before and after the 2010 Gulf of Mexico oil spill about the oil company's ability to respond to an accident.

U.S. District Judge Keith Ellison in Houston dismissed claims by purchasers of ordinary BP shares, citing a 2010 U.S. Supreme Court decision limiting the ability of purchasers of foreign securities to raise fraud claims.

The judge also dismissed claims by purchasers of American depositary shares against current Chief Executive Robert Dudley and several other BP officials.

Judge Ellison nonetheless refused to dismiss claims by the ADS investors against BP, former Chief Executive Anthony Hayward and former Chief Operating Officer for Exploration and Production Douglas Suttles, saying they had adequately pleaded violations of U.S. securities law.

The investors, who claimed BP touted its dedication to safety even as it cut budgets, "have sufficiently pleaded facts to demonstrate that BP misrepresented the size of the spill it was prepared to respond to in the Gulf and misrepresented the company's general spill response capabilities," Judge Ellison wrote.

BP spokesman Scott Dean declined to comment.

The plaintiffs were led by the New York State Common Retirement Fund and four Ohio public pension funds.

They claimed to have lost as much as 40% of their investments as BP's market value fell by more $91 billion within six weeks of the April 20, 2010, explosion of the Deepwater Horizon drilling rig.

The accident killed 11 people, and caused the largest offshore oil spill in U.S. history.

BP has set aside more than $40 billion for spill costs.

A federal trial to assign blame among BP, rig owner Transocean Ltd., cementing services provider Halliburton Co. and others is slated to begin on Feb. 27 in New Orleans. Later scheduled proceedings will assess cleanup efforts and environmental damage.

The Houston lawsuit covered investors who bought ordinary shares and ADSs between Jan. 16, 2007, and May 28, 2010, and has not yet been certified as a class action.

New York State Comptroller Thomas DiNapoli, who oversees the Common Retirement Fund, in a statement called Judge Ellison's decision a "victory" for the plaintiff investors.

"We believe that BP exaggerated its ability to prevent a catastrophic spill as well as its ability to respond to one should it occur," he said. "We look forward to holding BP accountable for its actions in court."

Lisa Hackley, a spokeswoman for Ohio Attorney General Mike DeWine, said that office is reviewing the opinion.

The Supreme Court's 2010 opinion in Morrison vs. National Australia Bank Ltd. limited the ability of investors to invoke Section 10(b) of the Securities Exchange Act of 1934 to pursue fraud claims over purchases of foreign companies' shares.

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In rejecting the claims of BP ordinary shareholders, Judge Ellison followed the reasoning of many other federal judges and said it did not matter that some trades of BP stock on the London Stock Exchange may have involved the use of U.S.-based market makers.

"Plaintiffs' cosmetic touch-ups will not give the corpse new life," Judge Ellison wrote. "Because the ordinary shares traded only on the LSE, Plaintiffs cannot point to the 'domestic transaction,' which must include a 'domestic purchase or sale,' required for section 10(b) liability following Morrison."

Judge Ellison refused to excuse Mr. Hayward, BP's chief executive at the time of the accident, from the case.

The judge cited Mr. Hayward's public statements about BP's emphasis on safety, including a promise that he would "focus on safety like a laser." This supported an inference that Mr. Hayward "was aware of inadequacies" in BP's safety plans, Judge Ellison said.

BP's ADRs closed Monday in New York up $1.02, or 2.2%, at $47.37.

The case is In re: BP P.L.C. Securities Litigation, U.S. District Court, Southern District of Texas, No. 10-md-02185.