An Ohio-based energy company, FirstEnergy Corp., has been ordered by the U.S. Securities and Exchange Commission (SEC) to pay a $100 million fine for its involvement in a $60 million bribery scheme. The SEC found that FirstEnergy violated antifraud provisions by misleading investors about its role in the political corruption scandal, which aimed to secure a $1 billion bailout for two of its nuclear plants.
The SEC’s cease and desist order stated that the company’s former CEO made false statements to investors in a press release and during a July 2020 earnings call, failing to disclose related payments. This penalty follows a separate $20 million settlement reached last month to avoid state criminal charges.
The bribery scheme, which has already led to prison sentences for several individuals, including former Ohio House Speaker Larry Householder, centered on FirstEnergy’s efforts to influence state lawmakers. Householder was sentenced to 20 years in prison for orchestrating the scheme, while lobbyist Matt Borges, a former chair of the Ohio Republican Party, received a five-year sentence.
As part of the scheme, $60 million in secret FirstEnergy funds was used to elect Householder’s preferred candidates and secure his position as House Speaker in 2019. The funds were then used to pass the controversial energy bill and block efforts to repeal it.
FirstEnergy admitted its role in the bribery plot in a July 2021 deferred prosecution agreement with the U.S. Department of Justice. Under that agreement, the company agreed to pay $230 million in penalties and implement reforms to avoid federal conspiracy charges. The company now has 14 days to pay the $100 million SEC fine or face additional interest charges.
Two former FirstEnergy executives, CEO Chuck Jones and Senior Vice President Michael Dowling, were indicted earlier this year but have denied wrongdoing. Another key figure, former Public Utilities Commission of Ohio chair Sam Randazzo, was also implicated in the scheme but died by suicide in April after pleading not guilty in court.
