November 13, 2024
- Suit stems from Deloitte’s auditing for Scana nuclear project
- Meets typicality, predominance certification requirements
Deloitte & Touche LLP failed to convince a federal court to deny certification of a class of investors suing over its audit reports on the ultimately abandoned $9 billion Scana Corp. nuclear reactor project.
The International Brotherhood of Electrical Workers Local 98 Pension Fund was typical of other class members in relying on alleged misrepresentations from the consulting firm, and Deloitte failed to shake a predominance finding when it argued those misrepresentations weren’t connected to later corrective notices, according to the US District Court for the District of South Carolina.
IBEW alleged that Deloitte, Scana’s longtime auditor, knew the V.C. Summer project couldn’t meet a federal tax credit deadline but continued to issue clean audit reports. The South Carolina project was abandoned in 2017 after running years behind schedule and costing more than $20 billion.
The project’s collapse has also brought securities and criminal charges, and civil litigation, against various parties over the past several years—from a $25 million settlement Scana reached with the SEC, to Scana executives pleading guilty to fraud charges.
Deloitte failed with its argument that the truth was revealed in a 10-K issued Feb. 24, 2017, or when the project was publicly abandoned in Jul. 31, 2017. “Questions of fact remain as to whether any disclosure before” Dec. 20, 2017 “completely cured the market,” the court said.
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Cohen Milstein Sellers & Toll PLLC is class counsel. Tinkler Law Firm LLC is liaison counsel. Moore & Van Allen and Milbank LLP represents Deloitte.
Read Deloitte Stuck With Investor Class Over Nuke Plant Audit Reports.