A $3 billion deal to settle securities fraud claims against Brazil’s state-run oil company Petrobras shouldn’t be finalized, an objector told the federal court overseeing the deal May 10.

A conflict exists between class members who bought Petrobras securities domestically and those who bought them through foreign transactions, objector William Thomas Haynes said.

Foreign purchasers can’t recover under U.S. law, so their inclusion in the settlement class unfairly dilutes the recovery of U.S. purchasers, he said.

The objection and any...