FirstEnergy Corp (FE) $100M SEC Fair Fund

Eligible claimants can submit their claims for compensation.

$100,000,000

Cash Settlement

SEC

Court

3-22111

Case number

01/01/2017

Class period Start

11/19/2020

Class period End

09/14/2026

Claim deadline

FirstEnergy has agreed to pay $100 million through an SEC Fair Fund to compensate investors, resolving claims that it participated in a political corruption scheme and failed to disclose material related-party transactions.

Outline

Between 2017 and 2020, FirstEnergy and its subsidiary FirstEnergy Solutions made roughly $60 million in payments to a 501(c)(4) entity controlled by an Ohio state legislator, in exchange for official action benefiting the companies. FirstEnergy misrepresented its role in the scheme to investors in July 2020 and failed to disclose related-party transactions tied to the payments. The SEC found these violations and established a $100 million Fair Fund for harmed investors.

Timeline
Between 2017 and 2020: FirstEnergy and FirstEnergy Solutions pay approximately $60 million to Generation Now, a 501(c)(4) entity controlled by a member of the Ohio House of Representatives, in exchange for specific official action.
On July 23–24, 2020: FirstEnergy makes misrepresentations about its role in the scheme to investors in an earnings call and in a Commission filing.
On September 12, 2024: SEC issues a Cease-and-Desist Order and imposes a $100,000,000 civil penalty, establishing the Fair Fund.
By September 14, 2026: Claims Bar Date — deadline to submit a claim.
Background

FirstEnergy participated in a multi-year political corruption scheme in which it and FirstEnergy Solutions funneled approximately $60 million to Generation Now, an entity organized under Section 501(c)(4) of the Internal Revenue Code and controlled by a member of the Ohio House of Representatives who was elected Speaker in January 2019. The 501(c)(4) structure helped conceal the source of the payments, which were made in exchange for specific official action benefiting the companies.

On July 23 and 24, 2020, FirstEnergy made misrepresentations to investors about its role in the scheme, both in an earnings call and in a filing with the SEC. The company also failed to disclose material related-party transactions involving payments to a 501(c)(4) organization funded and controlled in part by certain former FirstEnergy executives, and it failed to maintain adequate books, records, and internal accounting controls governing these payments and disclosures.

As the scope and consequences of the bribery scheme were revealed through a series of disclosures, FirstEnergy's stock price dropped, harming investors who had purchased shares at prices inflated by the company's misrepresentations. On September 12, 2024, the SEC issued a Cease-and-Desist Order under the Securities Act and Exchange Act and ordered FirstEnergy to pay a $100,000,000 civil penalty. Pursuant to Section 308(a) of the Sarbanes-Oxley Act, that penalty was converted into a Fair Fund for distribution to harmed investors, with Epiq Class Action and Claims Solutions, Inc. serving as Fund Administrator.

What Can Investors Expect Now?

FirstEnergy has agreed to pay $100 million through an SEC Fair Fund to compensate investors, resolving claims that it participated in a political corruption scheme and failed to disclose material related-party transactions.

If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.

Case Type

SEC Fair Fund

Case Status

Accepting Claims

Alleged Offence

Fraud,

Failure to Disclose

Suspected Party

Directors,

Management

Security Type

Stocks

Trade Direction

Long

Filing date

09/12/2024

Administrator

EPIQ

Trades matching type

FIFO

FirstEnergy Corp (FE) $100M SEC Fair Fund

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