FirstEnergy settles lawsuits seeking corporate reform

CLEVELAND (AP) — Akron-based First Energy said it has settled a series of shareholder lawsuits seeking corporate reform following a bribery and corruption scandal.

FirstEnergy, in a statement on Thursday, said the terms of the settlement include an agreement that six longtime board members will not stand for election at the company’s shareholders’ meeting in May. The board will now be responsible for overseeing FirstEnergy’s lobbying and political activities while a committee of board members will conduct a review of the current management team.

The deal is awaiting approval from U.S. District Judge Algenon Marbley.

FirstEnergy’s insurer will pay the company $180 million less fees owed to attorneys representing shareholders in the so-called derivative lawsuits. FirstEnergy spokeswoman Jennifer Young told the Akron Beacon Journal that the company received the money because the lawsuits were filed in the company’s name against board members and former executives. .

“Shareholders are essentially saying the company has been wronged,” Young said.

The lawsuits were filed in the months after U.S. Attorney David DeVillers announced in July 2020 that FirstEnergy secretly funded a $60 million bribery scheme to gain legislative approval for a $1 billion bailout. of two nuclear power plants in Ohio operated at the time by a subsidiary of FirstEnergy. .

FirstEnergy signed a Deferred Prosecution Agreement with the US Department of Justice in July 2021 that details how its leaders carried out the bribery scheme in concert with former Ohio House Speaker Larry Householder and others. FirstEnergy also agreed to pay a $230 million fine.

A federal charge of conspiracy to commit honest services fraud will be dismissed against FirstEnergy in 2024 if the company meets a long list of reforms listed in the agreement.

Householder, who was indicted in July 2020 on a federal conspiracy charge with four associates, has pleaded not guilty and is awaiting trial.

FirstEnergy still faces shareholder lawsuits alleging the company committed securities violations. The defendants include current CEO and chairman Steven Strah as well as former CEO Chuck Jones, who was fired by the company in October 2020 for violating company policies and its code of conduct.

Comments are closed.