Lead Plaintiff Deadline: 09/28/2020
SUMMARY OF CASE:
A securities class action has been filed against FirstEnergy Corp. (FE) on behalf of all purchasers of FirstEnergy common stock between February 21, 2017 through July 21, 2020. This case has been filed in the USDC – S.D.OH.
Defendant FirstEnergy is headquartered in Akron, Ohio. The Company is an electric utility company with subsidiaries and affiliates involved in the distribution, transmission and generation of electricity, as well as energy management and other energy-related services. Its ten electric utility operating companies comprise one of the United States’ largest investor-owned utilities, serving more than six million customers in Ohio, Pennsylvania, West Virginia, Virginia, Maryland, New Jersey, and New York. The Company also owned and operated two nuclear power plants in the State of Ohio, the Perry Nuclear Generating Station and the Davis-Besse Nuclear Power Station.
The Complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding FirstEnergy’s internal controls, business practices and prospects. Specifically, defendants touted FirstEnergy’s legislative “solutions” to problems with its nuclear facilities, but failed to
disclose that these “solutions” centered on an illicit campaign to corrupt high-profile state legislators in order to secure legislation favoring the Company. Over a nearly three-year period, FirstEnergy and its affiliates funneled more than $60 million to prominent state politicians and lobbyists, including Ohio Speaker Larry Householder, in order to secure the passage of Ohio House Bill 6 (“HB6”), which provided a $1.3 billion ratepayer-funded bailout to keep the Company’s failing
nuclear facilities in operation. In addition, defendants falsely represented that they were complying with state and federal laws and regulations regarding regulatory matters throughout the Class Period, exposing the Company and its investors to the extreme undisclosed risks of reputational, legal and
FirstEnergy’s unscrupulous tactics began to be revealed in dramatic fashion on July 21, 2020. That day, federal agents announced the arrest of Householder and four others persons, including a prominent FirstEnergy lobbyist, in connection with a $60 million racketeering and bribery scheme. The 82-page criminal complaint and affidavit detailed a stunning pay-to-play scheme in which FirstEnergy brazenly corrupted every facet of the legislative process in order to ensure the passage of HB6. Prosecutors described the case as involving the “‘largest bribery, money-laundering scheme’” in Ohio history
On this news, the price of FirstEnergy stock plummeted, trading as low as $22.85 per share on July 22, 2020, down 45% from its closing price of $41.26 per share on July 20, 2020, inflicting massive losses on FirstEnergy shareholders. This lawsuit seeks recompense for those losses, which resulted from defendants’ brazen violations of the federal securities laws as detailed herein.