FirstEnergy pays $100M in HB 6 settlement with SEC; former CEO faces civil fraud charges

FirstEnergy has agreed to pay a $100 million fine to settle civil fraud charges brought by the Securities and Exchange Commission in connection with the House Bill 6 nuclear plant bailout. But the utility’s former CEO will still face charges from the SEC.

The SEC charged former FirstEnergy CEO Chuck Jones with misleading investors after former Republican House Speaker Larry Householder was arrested in 2020 in a $60 million bribery case. A year later, FirstEnergy admitted to bribing the now-convicted and imprisoned Householder and the late Public Utilities Commission Chairman Sam Randazzo to secure approval for a billion-dollar nuclear power plant bailout in 2019. In that deferred plea agreement, the utility agreed to pay a $230 million penalty.

The SEC’s complaint in federal court says Jones told the public that “FirstEnergy acted ethically in this matter” and “transparently.” The complaint also alleges Jones misled the company’s accountant and assisted in misrepresentations FirstEnergy made in an SEC filing.

Jones pleaded not guilty to state corruption charges in February, along with former FirstEnergy senior vice president Michael Dowling. The two were fired from the company in October 2020. Randazzo was charged at the same time as the former executives and had also pleaded not guilty to federal charges. He committed suicide in April.

The SEC’s fine is significantly larger than FirstEnergy’s $20 million settlement with state prosecutors led by Republican Attorney General Dave Yost a month ago. That deal spared the company from state criminal charges in the case. Democratic state lawmakers have criticized that settlement as “staggering” and “unacceptable.”

FirstEnergy released a statement from President and CEO Brian X. Tierney: “We are pleased to have reached a resolution with the SEC as we begin a new chapter. Our focus today is on investing in our regulated electric utilities to improve the customer experience and support the energy transition.”