In re SCANA Corporation Securities Litigation
|Court:||United States District Court, District of South Carolina (Columbia Division)|
|Judge:||Hon. Margaret B. Seymour|
|Class Period:||01/19/2016 - 10/30/2017|
|Case Contacts:||John C. Browne, Lauren McMillen Ormsbee, Kurt Hunciker, Michael Mathai, Kate Aufses|
On January 23, 2018, Bernstein Litowitz was appointed co-lead counsel in a securities class action lawsuit on behalf the Blue Sky Group, against SCANA Corporation (SCANA) and certain of the company’s senior executives. The action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule l0b-5 promulgated thereunder, on behalf of all persons or entities that purchased or otherwise acquired the publicly traded securities of SCANA between January 19, 2016 and October 30, 2017 (the class period).
SCANA provides electricity and natural gas to roughly 1.6 million customers in the Southeastern United States. In 2008, SCANA began constructing two new nuclear reactors at the V.C. Summer site near Jenkinsville, South Carolina. Throughout the class period, SCANA allegedly made false and misleading statements that the construction was progressing well. The plaintiffs also allege SCANA also represented it was acting prudently when working on the nuclear project and, on that basis, successfully sought $1.7 billion in increased customer rates to offset construction costs.
The action alleges that while SCANA was touting its progress, the company and its senior executives knew the project suffered from a host of fundamental problems. In October 2015, the defendants received an independent report from expert consultants that detailed formidable obstacles, massive cost overruns, and imprudent management. The 130-page report concluded that “there [were] significant issues facing the project,” including “plans and schedules [that] are not reflective of actual project circumstances” and an engineering design which “is not yet completed” and “not constructible.” However, the defendants continued constructing the plants, touting its purported progress, and charging increased rates for well over a year.
In the summer of 2017, following the bankruptcy of its chief contractor due in large part to their work on the nuclear reactors, SCANA announced that it would abandon the construction of the nuclear reactors, after having charged their clients billions of dollars for this failed endeavor. Numerous public investigations were initiated and, numerous internal communications and the initial and final versions of the independent expert report that SCANA received were made public. In addition, the U.S. Attorney’s Office in South Carolina and the FBI initiated a criminal investigation, and SCANA’s CEO and executive vice president left the company.
The case is In re SCANA Corporation Securities Litigation, No. 17-cv-2616 (D.S.C.). The lead plaintiffs are Blue Sky Group and West Virginia Investment Management Board. Bernstein Litowitz represents lead plaintiff Blue Sky Group. Lead Plaintiffs will file a consolidated class action complaint on March 26, 2018.
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