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SEC Sues South Carolina Energy Companies, Former Executives Over Nuclear Fraud

The U.S. Securities and Exchange Commission charged SCANA Corp., two of its former top executives, and South Carolina Electric & Gas Co., 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.

Dominion Energy said, "This is a disappointing development related to a long-standing investigation by the SEC regarding pre-merger activities. Dominion Energy has been fully cooperating with the SEC in this investigation. ... We are taking this matter very seriously, and are reviewing the complaint to determine our next steps."

Dominion Energy said that in December 2019, it executed a settlement agreement with former SCANA shareholders for $192.5 million, which was preliminarily approved by the federal district court in South Carolina earlier this month.

Meanwhile, the SEC's complaint alleged 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.

SCANA abandoned the project in mid-2017 with neither nuclear unit completed.

The SEC complaint alleged 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.

The SEC's complaint, filed in federal court in South Carolina, 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.

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