$192 million settlement reached for SCANA investors following failed Nuclear Project
The United States District Court for the District of South Carolina approved a $192 million settlement today to resolve shareholder claims that alleged SCANA Corp. and certain of the energy company’s executives violated the Securities Exchange Act and misled the public during its handling of a failed nuclear reactor project in South Carolina. The settlement is the largest securities class action recovery obtained in the District of South Carolina, the fifth largest securities class action recovery in the history of the Fourth Circuit, and among the top 100 securities class action recoveries nationwide.
Motley Rice, as liaison counsel, represented shareholders in the lawsuit, In re SCANA Corporation Securities Litigation, No. 3:17-cv-02616-MBS, which was filed in 2017 for purchasers of the publicly traded securities of SCANA (NYSE: SCG) from October 27, 2015 through December 20, 2017, inclusive (the Class Period).
“We appreciate the Court's thoughtful analysis and consideration of the settlement, which is an excellent result for class members and the largest securities class action recovery ever in South Carolina,” said Marlon Kimpson, Motley Rice attorney for the plaintiffs told the Post and Courier.
Headquartered in Cayce, S.C., SCANA is a $7.3 billion energy-based holding company that is principally engaged, through its subsidiaries, in regulated electric and natural gas utility operations in South Carolina, North Carolina and Georgia. The company spent more than $9 billion over the past decade on a project to build two nuclear reactors at the V.C. Summer Nuclear Station in South Carolina (the “Nuclear Project”). SCANA abandoned the Nuclear Project in July 2017. Evidence then came to light that, for at least the prior 18 months, the company and its officials appeared to know of severe problems plaguing the Nuclear Project but failed to inform the public or shareholders. The project was financed by public investors as well as by raising customers’ electrical rates nine times.
The suit alleged that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding the construction of the Nuclear Project, assuring investors that spending was prudent and substantial progress was being made, even when cost overruns and other delays began to materialize. As a result of defendants’ false statements and/or omissions, SCANA’s common stock traded at artificially inflated prices during the Class Period, the complaint alleged.
The South Carolina Attorney General (SC AG) opened an investigation into SCANA’s abandonment of the Nuclear Project in August 2017 and South Carolina state senators called for a special legislative session to investigate SCANA. On September 22, 2017, the SC AG publicly requested that the South Carolina State Law Enforcement Division launch a criminal investigation into the Nuclear Project.
As a result of this news and other disclosures, SCANA’s stock price declined from a Class Period high of $76.12 per share in July 2016 to $37.39 per share, a decline of more than 50%.
The settlement recovers shareholder dollars that plaintiffs allege were lost due to SCANA’s actions.
Motley Rice attorneys Marlon E. Kimpson, William S. Norton, and Joshua C. Littlejohn represented the plaintiffs as liaison counsel, along with co-counsel David P. Abel of U.S. Market Advisors Law Group PLLC.