CHARLESTON, S.C. (WCBD) – SCANA has agreed to settle fraud charges which stem from the failed VC Summer nuclear plant project.
United States Attorney Peter M. McCoy, Jr. announced on Thursday that SCANA Corp., which owned South Carolina Electric & Gas, agreed to settle the Securities and Exchange Commission’s lawsuit charging them with defrauding investors by making false and misleading statements about the nuclear plant expansion that was ultimately abandoned.
According to a press release from McCoy’s office, the proposed settlement, which remains subject to court approval, would require SCANA to pay a $25 million penalty and require SCANA and SCE&G to pay $112.5 million in disgorgement plus prejudgment interest.
“Shareholders were deceived by SCANA and robbed of millions upon millions of dollars,” said U.S. Attorney McCoy. “I am hopeful that, along with the criminal charges brought forward by our office, this multimillion-dollar civil fine and penalty shows that no person or organization is above the law.”
The SEC’s complaint, which was filed in February 2020, alleged that SCANA, SCE&G, and two former senior executives misled investors by claiming that a project to build two nuclear units would qualify the company for more than $1 billion in tax credits when, in fact, they knew the project was far behind schedule and unlikely to qualify for the tax credits.
It also alleged that the false statements and omissions boosted SCANA’s stock price and enabled it to raise rates on customers and sell more than $1 billion in bonds.
SCANA later announced it was scrapping the project in 2017, causing investors to lose hundreds of millions of dollars.
“The securities laws require public companies and their senior executives to speak truthfully in their statements to investors,” said Justin Jeffries, Associate Director of the SEC’s Atlanta Regional Office. “This settlement holds SCANA and SCE&G accountable for their alleged fraud and reinforces that companies must not deceive investors.”
The SEC’s complaint, which was filed in federal court in South Carolina, charged SCANA, SCE&G, SCANA’s former CEO Kevin Marsh and former executive vice president Stephen Byrne with violations of the antifraud provisions of the federal securities laws.
The complaint charged SCANA, SCE&G and Marsh with reporting violations.
According to Thursday’s news release, without admitting or denying the allegations, SCANA and SCE&G agreed to a permanent injunction and to pay $112.5 million in disgorgement plus prejudgment interest, which will be deemed satisfied by SCANA and SCE&G’s settlement payments and related rate payer and shareholder litigation.
SCANA also agreed to pay a $25 million penalty. The litigation against Marsh and Byrne is still ongoing.
SCANA and SCE&G were bought out by Dominion Energy of Virginia in 2019.