Lead Plaintiff Deadline: 02/14/2020
SUMMARY OF CASE:
A securities class action has been filed against Exelon Corporation (EXC) on behalf of a class consisting of investors who purchased or otherwise acquired Exelon securities between February 9, 2019 through November 1, 2019. This case has been filed in the USDC – Northern District of Illinois.
Exelon is a utility services holding company that engages in energy generation and delivery businesses in the U.S. and Canada.
Exelon owns various “Utility Registrants” that are regulated by State utility commissions, including, among other entities, Commonwealth Edison (“ComEd”). ComEd’s parent company is Exelon Utilities.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Exelon and/or its employees were engaged in unlawful lobbying activities; (ii) the foregoing increased the risk of a criminal investigation into Exelon; (iii) ComEd’s revenues were in part the product of unlawful conduct and thus unsustainable; and (iv) that, as a result, the Company’s public statements were materially false and misleading at all relevant times.
On July 15, 2019, during pre-market hours, Exelon filed a Current Report on Form 8-K with the SEC, disclosing that both Exelon and ComEd had “received a grand jury subpoena from the U.S. Attorney’s Office for the Northern District of Illinois requiring production of information concerning their lobbying activities in the State of Illinois.”
Then, on October 9, 2019, during pre-market hours, Exelon filed another Current Report on Form 8-K with the SEC, disclosing that, on October 4, 2019, both Exelon and ComEd “received a second grand jury subpoena from the U.S. Attorney’s Office for the Northern District of Illinois that requires production of records of any communications with certain individuals and entities, including Illinois State Senator Martin Sandoval.” That Current Report also disclosed that, as far back as “[o]n June 21, 2019, the Exelon Corporation Board formed a Special Oversight Committee, consisting solely of independent directors, to oversee [Exelon and ComEd’s] cooperation and compliance with the subpoena, any further action taken by the U.S. Attorney and any resulting actions that may be required or recommended.”
On October 15, 2019, shortly before the market closed, Exelon issued a press release announcing the abrupt departure of Anne Pramaggiore (“Pramaggiore”), Chief Executive Officer (“CEO”) of Exelon Utilities, and former President/CEO of ComEd. The Company’s statement on Pramaggiore’s retirement offered no reason for her departure, but analysts following the Company came to the conclusion that the criminal subpoenas and Pramaggiore’s abrupt resignation were related.
On this news, Exelon’s stock price fell $2.15 per share, or 4.57%, to close at $44.91 per share on October 16, 2019.
Then, on October 31, 2019, during intraday trading, Exelon filed a Quarterly Report on Form 10-Q with the SEC, disclosing that “[o]n October 22, 2019, the SEC notified Exelon and ComEd that it has also opened an investigation into their lobbying activities.”
On this news, Exelon’s stock price fell $1.17 per share, or 2.51%, to close at $45.49 per share on October 31, 2019.
Finally, on November 1, 2019, after the market opened, the Chicago Tribunereported that “[a] source with knowledge of the case in Chicago” confirmed that “Pramaggiore is one focus of the ongoing federal investigation.” According to the same article, “[t]he ComEd lobbying investigation dates to at least mid-May, when the FBI executed search warrants at the homes of former lobbyist Mike McClain of Quincy, a longtime confidant of House Speaker Michael Madigan, and of former 23rd Ward Ald. Michael Zalewski” (emphasis added). Additionally, “[t]he information sought by the FBI included records of communications among Madigan, McClain and Zalewski about attempts to obtain ComEd lobbying work for Zalewski.”
On this news, Exelon’s stock price fell an additional $0.15 per share to close at $45.34 per share on November 1, 2019—a total decline of 2.83% since the initial announcement of the SEC investigation.