Additional Coverage:
FirstEnergy Corp., an energy company located in Akron, Ohio, has been fined $100 million by the U.S. Securities and Exchange Commission for misleading investors about its involvement in a $60 million bribery scandal.
According to the SEC, FirstEnergy violated antifraud provisions by not accurately representing its role in the corruption scheme and not disclosing related payments. This misconduct included misstatements made by the former CEO during a news release and a July 2020 earnings conference call.
This penalty follows a previous agreement where FirstEnergy agreed to pay $20 million to avoid criminal charges in a deal with state prosecutors. The bribery plot, which led to a lengthy prison term for a former Ohio House speaker, aimed to influence state lawmakers to pass a $1 billion bailout for two of FirstEnergy’s nuclear plants and to thwart a repeal effort against the bill.
FirstEnergy’s current CEO, Brian Tierney, expressed satisfaction with the SEC settlement and noted that the penalty must be paid within 14 days to avoid additional interest charges. In April, former CEO Chuck Jones and Senior Vice President Michael Dowling were indicted as part of this ongoing investigation; both were dismissed in October 2020 for breaching company policies and standards and have denied any wrongdoing.
Sam Randazzo, the former chair of the Public Utilities Commission of Ohio who was charged alongside them, pleaded not guilty before his suicide at age 74 in April. In June 2023, former Ohio House Speaker Larry Householder received a 20-year prison sentence for orchestrating the scheme, while lobbyist Matt Borges, a former Ohio Republican Party chair, was sentenced to five years.
Federal prosecutors revealed that those implicated used $60 million in secretly funded FirstEnergy cash to help Householder’s favored Republican candidates win House seats in 2018 and secure his speakership in January 2019. The funds were also used to ensure the corrupted energy bill’s passage and conduct a campaign to block any repeal referendum.
FirstEnergy accepted culpability for its part in the bribery as part of a July 2021 deferred prosecution agreement with the U.S. Department of Justice, agreeing to pay $230 million and undertake a broad list of reforms within three years to avoid federal criminal prosecution for conspiracy.