On January 18, 2018, Labaton Keller Sucharow was appointed co-lead counsel in a securities class action lawsuit on behalf the West Virginia Investment Management Board, against SCANA Corporation (SCANA) and certain of the company’s senior executives. 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 (the Nuclear Project). In November 2015, 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, Defendants allegedly continued constructing the plants, touting its purported progress, and charging increased rates for over a year.
In 2017, South Carolina Governor Henry McMaster publicly released the independent expert report that SCANA received. Soon thereafter, 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. Defendants have now abandoned the nuclear power plant project.
Lead Plaintiffs filed an amended complaint on March 30, 2018, alleging that Defendants misrepresented the status and their oversight of the Nuclear Project, including by assuring investors that the Nuclear Project was on schedule and on budget, making significant progress towards completion, and was being managed prudently and transparently by Defendants. According to the Complaint, such statements were false and misleading because Defendants allegedly knew from the start of the Class Period that the Nuclear Project was not realistically going to be completed by 2020, as planned, allegedly due in large part to Defendants’ deficient oversight.
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 March 29, 2019, the Court largely denied Defendants motion to dismiss.
The case is In re SCANA Corporation Securities Litigation, No. 17-cv-2616 (D.S.C.). Lead Plaintiffs are West Virginia Investment Management Board and Blue Sky. Labaton Keller Sucharow represents lead plaintiff West Virginia Investment Management Board.
On October 2, 2019, Lead Plaintiffs, on behalf of the Settlement Class reached an agreement-in-principle with defendants to settle the Action for $192,500,000, with $160,000,000 being paid in cash and $32,500,000 being paid in cash or shares of freely tradable Dominion Energy, Inc. (Dominion Energy) common stock (the Settlement), at the option of SCANA. On December 20, 2019, the Parties entered into the Stipulation and Agreement of Settlement, which sets forth the final terms and conditions of the Settlement.
On February 11, 2020, the Court preliminarily approved the Settlement, authorized notice to be disseminated to potential Settlement Class Members and scheduled the final Settlement Fairness Hearing to consider whether to grant final approval to the Settlement.
On July 23, 2020, the Court approved the Settlement, Plan of Allocation, and request for attorneys’ fees and expenses.
