SEC Charges American Electric Power Company with Making Fraudulent Disclosures

ADMINISTRATIVE PROCEEDING
File No. 3-22425

January 17, 2025 – The Securities and Exchange Commission today charged American Electric Power Company, Inc. (“AEP”) with fraud in connection with statements it made in a press release regarding AEP’s relationship with a related party and payments made to entities associated with politicians. AEP agreed to settle the charges and pay a civil penalty of $19 million.

According to the SEC’s order against AEP, in a July 2020 press release, AEP made misleading statements regarding its connection to Empowering Ohio’s Economy, Inc. (“Empowering Ohio”), an Ohio-based 501(c)(4) non-profit organization. Specifically, the Commission found that AEP’s statements in the press release created the impression that AEP had not made payments to certain 501(c)(4) organizations associated with politicians and that AEP contributed to Empowering Ohio to further Empowering Ohio’s mission.  In reality, according to the order, AEP was Empowering Ohio’s sole source of funding and AEP employees directed Empowering Ohio’s contributions totaling $1.2 million to 501(c)(4) organizations associated with politicians. Additionally, the Commission found that AEP failed to disclose material related party transactions with respect to payments AEP made to Empowering Ohio. The order also finds that AEP violated the books and records and internal accounting controls provisions of the federal securities laws.

AEP consented, without admitting or denying the findings, to a cease-and-desist order finding that it violated Section 17(a)(2) of the Securities Act. The order also finds that AEP violated Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder.

The SEC’s investigation was conducted by Natalie Garner and Justin Delfino of the Public Finance Abuse Unit, Keith Constance of the SEC’s Chicago Regional Office, and Peter Rosario of the Home Office. The investigation was supervised by Brian Fagel and Kevin Guerrero.