(Bloomberg) -- FirstEnergy Corp. surged the most in more than five months after the Ohio utility reached an agreement with federal prosecutors over a corruption case involving a $1 billion state bailout for nuclear power plants.
Under a deferred-prosecution agreement announced Thursday, FirstEnergy admitted that it conspired with public officials and others to pay millions of dollars in bribes. The company agreed to pay a $230 million penalty.
The shares climbed as much as 5.9%, the most intraday since Feb. 18.
“FirstEnergy’s Board of Directors moved swiftly and decisively to investigate this matter and, along with the management team, has cooperated and will continue to fully cooperate with the U.S. Attorney’s Office,” Donald T. Misheff, nonexecutive chairman of FirstEnergy’s board of directors, said in a statement.
Under the three-year deferred prosecution agreement, authorities have filed a single charge of conspiracy to commit honest services wire fraud against the company. The charge will be dismissed if FirstEnergy abides by all terms of the agreement.
What Bloomberg Intelligence Says
“Moving beyond charges of bribery by paying a $230 million fine will allow FirstEnergy to turn its full attention to the company’s new all-regulated structure, we believe.
- Kit Konolige, BI Senior Industry Analyst.
Read the full report here.
The case began in July 2020 after federal officials charged then-Ohio House Speaker Larry Householder and others in a racketeering conspiracy involving almost $61 million in bribes to secure a more than $1 billion bailout of two nuclear power plants owned by the subsidiary, now known as Energy Harbor Corp.
FirstEnergy later fired its chief executive officer and had its credit rating cut. A nonprofit organization that allegedly funneled money to Householder and others pleaded guilty. FirstEnergy said in April that it was in talks with the U.S. Attorney’s Office on the bribery case.
Ohio’s attorney general sued FirstEnergy and Energy Harbor in September, accusing them of “corrupt activity” in connection with the subsidies. FirstEnergy later gave up a $102 million annual subsidy as part of a deal to pause the lawsuit.
In November, FirstEnergy disclosed that former executives violated company policies, citing a payment of about $4 million to an entity associated with someone subsequently appointed to be a state regulator. Public Utilities Commission of Ohio Chairman Sam Randazzo resigned after the disclosure.
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