July 28, 2020 - An investor in shares of FirstEnergy Corp. (NYSE: FE) filed a lawsuit in the U.S. District Court for the Southern District of Ohio over alleged violations of Federal Securities Laws by FirstEnergy Corp. in connection with certain allegedly false and misleading statements made between February 21, 2017 and July 21, 2020.

Akorn, OH based FirstEnergy Corp., through its subsidiaries, generates, transmits, and distributes electricity in the United States. FirstEnergy Corp. reported that its annual Total Revenue declined from over $11.26 billion in 2018 to $11.03 billion in 2019, and that its Net Income declined from over $1.34 billion in 2018 to $912 million in 2019. Shares of FirstEnergy Corp. (NYSE: FE) grew from $35.57 per share in December 2018 to as high as $52.52 per share on February 18, 2020.

On July 21, 2020, federal agents announced the arrest of Householder and four others persons, including a prominent FirstEnergy lobbyist, in connection with a $60 million racketeering and bribery scheme. The 82-page criminal complaint and affidavit detailed an alleged pay-to-play scheme in which FirstEnergy corrupted every facet of the legislative process in order to ensure the passage of HB6, including defending the bill against a citizens’ ballot initiative. Prosecutors described the case as involving the “‘largest bribery, money-laundering scheme’” in Ohio history.

Shares of FirstEnergy Corp. (NYSE: FE) declined from over $52 per share in February 2020, to as low as $22.85 per share on July 22, 2020.

According to the complaint the plaintiff alleges on behalf of purchasers of FirstEnergy Corp. (NYSE: FE) common shares between February 21, 2017 and July 21, 2020, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between February 21, 2017 and July 21, 2020, the defendants touted FirstEnergy’s legislative “solutions” to problems with its nuclear facilities, but failed to disclose that these “solutions” centered on an illicit campaign to corrupt high-profile state legislators in order to secure legislation favoring the Company, that over a nearly three-year period, FirstEnergy and its affiliates funneled more than $60 million to prominent state politicians and lobbyists, including Ohio Speaker Larry Householder, in order to secure the passage of Ohio House Bill 6 (“HB6”), which provided a $1.3 billion ratepayer-funded bailout to keep the Company’s failing nuclear facilities in operation. In addition, defendants falsely represented that they were complying with state and federal laws and regulations regarding regulatory matters between February 21, 2017 and July 21, 2020, exposing the Company and its investors to the extreme undisclosed risks of reputational, legal and financial harm, and that as a result of defendants’ false statements and omissions, the price of FirstEnergy stock was artificially inflated to a high of more than $50 per share between February 21, 2017 and July 21, 2020, and Company insiders were able to sell more than $17 million worth of their FirstEnergy shares at these artificially inflated prices.