SEC Charges South Carolina Energy Companies, Former Executives With Defrauding Investors
Charges Spring From Failed $9 Billion Nuclear Power Plant Expansion
FOR IMMEDIATE RELEASE
Washington D.C., Feb. 27, 2020 —
The Securities and Exchange Commission today charged SCANA Corp., two of its former top executives, and South Carolina Electric & Gas Co. (SCE&G), now known as Dominion Energy South Carolina Inc., with defrauding investors by making false and misleading statements about a nuclear power plant expansion that was ultimately abandoned.
The SEC’s complaint alleges that SCANA, its former CEO Kevin Marsh, former Executive Vice President Stephen Byrne, and subsidiary SCE&G misled investors about a project to build two nuclear units that would qualify the company for more than $1 billion in tax credits. According to the complaint, the defendants claimed that the project was on track even though they knew it was far behind schedule, making it unlikely to qualify for the tax credits. The complaint further alleges one SCANA executive said that officers of the company "flew around the country showing the same . . . construction pictures from different angles and played our fiddles" while the project itself "was going up in flames." SCANA abandoned the project in mid-2017 with neither nuclear unit completed. The complaint alleges that the false statements and omissions enabled SCANA to boost its stock price, sell more than $1 billion in bonds, and obtain regulatory approval to raise customers' rates to finance the project.
"When making statements to the public, executives cannot provide false information or half-truths," said Richard R. Best, Director of the SEC's Atlanta Regional Office. "This case demonstrates the SEC's commitment to holding companies and individuals at the highest corporate levels responsible when they mislead investors and fail to provide them with full and fair information."
The SEC's complaint, filed in federal court in South Carolina, charges SCANA, SCE&G, Marsh, and Byrne with violations of the antifraud provisions of the federal securities laws, and charges SCANA, SCE&G, and Marsh with reporting violations. The complaint seeks a permanent injunction, return of allegedly ill-gotten gains along with prejudgment interest, and financial penalties from all defendants, and an officer and director bar against Marsh and Byrne.
The SEC's investigation was conducted by John O'Halloran and supervised by Natalie Brunson and Justin Jeffries of the Atlanta Regional Office. The litigation will be led by Graham Loomis and H.B. Roback. The SEC appreciates the assistance of the U.S. Attorney's Office for the District of South Carolina and the Federal Bureau of Investigation in this matter.