- Company Name
- PG&E Corporation
- Stock Symbol
- Class Period
- April 29, 2015 to June 8, 2018
- Motion Deadline
- August 11, 2018
- Northern District of California
The complaint charges PG&E and certain of its officers with violations of the Securities Exchange Act of 1934. PG&E is a holding company whose primary operating subsidiary is Pacific Gas and Electric, a public utility operating in northern and central California that provides electricity and natural gas distribution, electricity generation, procurement and transmission, and natural gas procurement, transportation and storage.
The complaint alleges that, throughout the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding PG&E’s compliance with state laws and regulations. According to the complaint, PG&E violated state law by failing to maintain electricity transmission and distribution networks in compliance with safety requirements and regulations, and as a consequence, PG&E’s electricity networks caused numerous wildfires in California in 2017. As a result of defendants’ false statements and/or omissions, PG&E securities traded at artificially inflated prices during the Class Period, with the price of PG&E stock reaching a high of more $70 per share.
On or about October 8, 2017, several wildfires started in California, burning at least 245,000 acres in several northern California counties. On October 13, 2017, PG&E filed a Form 8-K with the SEC announcing that the California Department of Forestry and Fire Protection (“Cal Fire”) had initiated an investigation into the wildfires, including into the role power lines and other facilities of Pacific Gas and Electric may have played. This disclosure caused the price of PG&E stock to fall over 22%, or $15.72 per share.
On May 25, 2018, Cal Fire announced it had determined the cause of four of the wildfires, stating that the fires “were caused by trees coming into contract with power lines.” On this news, PG&E’s stock price fell over 5%. On June 8, 2018, after the markets closed, Cal Fire announced it had determined the causes of 12 of the wildfires. According to Cal Fire, the wildfires were “caused by electric power and distribution lines, conductors and the failure of power poles.” Cal Fire further stated that its “investigations have been referred to the appropriate county District Attorney’s offices for review in eight of the 12 fires . . . due to evidence of alleged violations of state law.”
Then, on June 9, 2018, Bloomberg published an article entitled “PG&E May Face Criminal Charges After Probe of Deadly Wildfires.” The article stated that after its investigation into the causes of the wildfires, which “altogether killed 44 people, consumed thousands of homes and racked up an estimated $10 billion in damages,” Cal Fire had “found evidence of alleged violations of law by PG&E in connection with” the fires, and that “PG&E equipment caused at least 12 of the wine country blazes.” On this news, the price of PG&E stock fell $1.69 per share, or more than 4%, to close at $39.76 per share on June 11, 2018.