The U.S. Securities and Exchange Commission on Thursday (Feb. 27) charged Dominion Energy’s South Carolina utility SCANA Corp. and two former executives with civil fraud in connection with the 2017 $10 billion collapse of the V.C. Summer nuclear plant expansion. The securities agency said the company and its top executives repeatedly lied about the progress of the failed project, deceiving investors and stakeholders.
The SEC’s order said, “This case arises out of a historic securities fraud perpetrated by senior executives at SCANA Corporation and its subsidiary South Carolina Electric & Gas Company. SCANA and its senior executives repeatedly deceived investors, regulators, and the public over several years about the status of a $10 billion nuclear project. When the truth was revealed, it resulted in hundreds of millions of dollars in losses to SCANA’s investors and to South Carolinians.”
As the two-unit 2000-MW nuclear project proceeded, SCANA executives consistently told investors, regulators, and the public that the project was going well, was on schedule and budget. They were lying, according to the federal regulators.
SCANA Corp. is now defunct, having been bought by Virginia-based Dominion in January 2019.
The SEC charged former SCANA CEO Kevin Marsh, 64, and executive vice president Stephen Byrne, 59, seeking disgorgement of “ill-gotten gains,” and that they be banned from ever running any publicly-traded companies in the future. The SEC said, “Despite knowing that the schedule was unreliable and the tax credits were at risk, SCANA’s senior management publicly touted the construction schedule and the company receiving $1.4 billion in federal tax credits for the expansion project.”
According to public records, in 2017, the year the project crashed, SCANA paid Marsh $5 million and Byrne $2 million. The State reported that in 2016, as the project cratered, Marsh got a $1.4 million bonus and Byrne got a $620,000 bonus for their oversight of the failing project.
The SEC said, “By regularly communicating to the public that the project was progressing, SCANA misled investors and others as to the true status of the project and failed to disclose material information revealing that the schedule was unreliable, significant additional delays were likely to occur, and the critical tax credits were at risk.”
South Carolina’s The State newspaper noted, “And just last week in a separate civil case in state court, Byrne pleaded the Fifth Amendment during a deposition, declining to answer questions in order to protect himself from self-incrimination, according to court filings. Byrne cited an ongoing FBI investigation into alleged criminal wrongdoing in the V.C. Summer case.”
No criminal charges have been filed.
— Kennedy Maize