Exelon Corporation Class Action Lawsuit
- Company Name
- Exelon Corporation
- Stock Symbol
- Class Period
- February 9, 2019 to November 1, 2019
- Northern District of Illinois
On December 16, 2019, the Exelon Corporation class action lawsuit was filed charging Exelon and certain of its officers with violations of the Securities Exchange Act of 1934. The Exelon class action lawsuit was commenced in the Northern District of Illinois on behalf of purchasers of Exelon securities between February 9, 2019 and November 1, 2019 (the “Class Period”) and is captioned Flynn v. Exelon Corporation, et al., No. 19-cv-08209.
Exelon is a utility services holding company that engages in energy generation and delivery businesses in the United States and Canada. Exelon owns various “Utility Registrants” that are regulated by state utility commissions, including, among other entities, Commonwealth Edison (“ComEd”). ComEd’s parent company is Exelon Utilities.
The Exelon securities class action lawsuit alleges that during the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding Exelon’s business and operations. Specifically, defendants failed to disclose that: (i) Exelon and/or its employees were engaged in unlawful lobbying activities, which increased the risk of a criminal investigation into Exelon; (ii) ComEd’s revenues were in part the product of unlawful conduct and thus were unsustainable; and (iii) as a result, Exelon’s public statements were materially false and misleading at all relevant times.
Exelon has been the subject of numerous governmental investigations into illicit lobbying activities and corruption. On July 15, 2019, Exelon disclosed that both it and ComEd had “received a grand jury subpoena from the U.S. Attorney’s Office for the Northern District of Illinois requiring production of information concerning their lobbying activities in the State of Illinois.” Similarly, on October 9, 2019, Exelon disclosed that, on October 4, 2019, both Exelon and ComEd had “received a second grand jury subpoena from the U.S. Attorney’s Office for the Northern District of Illinois that requires production of records of any communications with certain individuals and entities, including Illinois State Senator Martin Sandoval.”
On October 15, 2019, Exelon announced the abrupt departure of Anne Pramaggiore, Exelon Utilities’ CEO and the former President/CEO of ComEd. Then, on October 31, 2019, Exelon disclosed that, “[o]n October 22, 2019, the [U.S. Securities and Exchange Commission had] notified Exelon and ComEd that it has also opened an investigation into their lobbying activities.” On November 1, 2019, the Chicago Tribune reported “[a] source with knowledge of the case in Chicago” had confirmed that “Pramaggiore is one focus of the ongoing federal investigation.” According to the same article, “[t]he ComEd lobbying investigation dates to at least mid-May, when the FBI executed search warrants at the homes of former lobbyist Mike McClain of Quincy, a longtime confidant of House Speaker Michael Madigan, and of former 23rd Ward Ald. Michael Zalewski.”
These disclosures caused the prices of Exelon securities to decline significantly, causing investors in Exelon securities to suffer investment losses.
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