Exelon To Pay More Than $46 Mln Penalty To Settle SEC Fraud Charges

(RTTNews) - Exelon Corp. (EXC) agreed to pay a civil penalty of $46.2 million to settle the U.S. Securities and Exchange Commission's fraud charges over a political corruption scheme against Exelon and its unit Commonwealth Edison Company.

The SEC charged Exelon, electric utility company Commonwealth Edison Company or ComEd, and former ComEd CEO Anne Pramaggiore with fraud in connection with a multi-year scheme to corruptly influence and reward then-Speaker of the Illinois House of Representatives Michael Madigan. The charges against Pramaggiore will be litigated.

According to the SEC's order against Exelon and ComEd, from 2011 through 2019, ComEd arranged for various associates of Madigan to obtain jobs, subcontracts, and monetary payments, all with the intent to influence Madigan regarding legislation favorable to ComEd.

The order found that ComEd arranged payments to Madigan's associates through third-party vendors to conceal the size of the payments and to assist ComEd in denying responsibility for oversight of Madigan's associates, who in some instances did little to none of the work for which they were hired.

The order found that ComEd made indirect payments totaling more than $1.3 million to Madigan's associates. In a deferred prosecution agreement entered into with criminal authorities, ComEd acknowledged that Madigan's support of legislation favoring ComEd resulted in reasonably foreseeable anticipated benefits to ComEd of more than $150 million.

The SEC's complaint against Pramaggiore alleged that she participated in, and in some instances directed, the bribery scheme. The complaint alleged that Pramaggiore did not disclose the bribery scheme and instead misled investors when she characterized ComEd's lobbying activities as legitimate. The complaint also alleged that, as part of the scheme, Pramaggiore lied to Exelon's auditors and filed false certifications.

The SEC seeks permanent injunctive relief, disgorgement plus prejudgment interest, a civil penalty, and an officer and director bar against Pramaggiore.