- Company Name
- Edison International
- Stock Symbol
- Class Period
- February 23, 2016 to November 12, 2018
- Motion Deadline
- January 15, 2019
- Central District of California
The complaint charges Edison International (“Edison”) and Southern California Edison Company (“SCE”) (together the “Company”) and certain of their current and former officers with violations of the Securities Exchange Act of 1934. Edison is the parent holding company of SCE. SCE is an investor-owned public utility primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area of Southern California. The Company supplies electricity primarily to residential, commercial, industrial, agricultural and other customers, as well as public authorities, through transmission and distribution networks. The Company serves approximately 5 million customers.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding the Company’s business, operations and compliance policies. Specifically, defendants made false and misleading statements and/or failed to disclose that, in violation of state laws and regulations, the Company had failed to maintain electricity transmission and distribution networks in compliance with safety requirements and that the Company’s noncompliant electricity networks created a significantly heightened risk of wildfires in California. As a result of this information being withheld from investors, Edison securities traded at artificially inflated prices during the Class Period, reaching a high of more than $80 per share.
On November 8, 2018, two wildfires, designated the Hill Fire and the Woolsey Fire, started in Southern California. According to the California Department of Forestry and Fire Protection (“Cal Fire”), the Hill Fire, which broke out in Ventura County, subsequently grew to 4,531 acres, and the Woolsey Fire, which stretched from Los Angeles County to Ventura County, burned 93,662 acres, including 83% of all National Parks Service land in the Santa Monica Mountains National Recreation Area.
On November 12, 2018, the California Public Utilities Commission (“CPUC”) launched an investigation into Edison’s subsidiary SCE in order to “assess the compliance of electrical facilities with applicable rules and regulations in fire-impacted areas.” According to the CPUC, electrical infrastructure may have suffered malfunctions near ground zero of the blazes. Specifically, it was reported that on the day the fires began, SCE issued an alert to the CPUC that a substation circuit near the Woolsey Fire origin “relayed,” or sensed, a disturbance on the circuit, just two minutes before Cal Fire said that the devastating fire began.
Following the CPUC’s announcement, Edison’s stock price fell $7.44 per share, or more than 12%, to close at $53.56 per share on November 12, 2018. Over the following days, as the Hill and Woolsey Fires continued to burn, Edison’s stock price continued to fall, closing at $47.19 on November 15, 2018, an aggregate drop of 32% from its price prior to the CPUC’s November 12, 2018 announcement.