SEC v. SCANA CORPORATION; DOMINION ENERGY SOUTH CAROLINA, INC. (f/k/a SOUTH CAROLINA ELECTRIC & GAS COMPANY); KEVIN B. MARSH; and STEPHEN A. BYRNE, No. 3:20-CV-00882-MGL, District of South Carolina (Feb. 27, 2020) — Complaint

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION

UNITED STATES SECURITIES AND
EXCHANGE COMMISSION,

                    Plaintiff,

                    v.

SCANA CORPORATION,

DOMINION ENERGY SOUTH
CAROLINA, INC. (f/k/a SOUTH
CAROLINA ELECTRIC & GAS
COMPANY),

KEVIN B. MARSH, and

STEPHEN A. BYRNE,

                    Defendants.

Civil Action No. ___________

Jury Trial Demanded

COMPLAINT

 Plaintiff United States Securities and Exchange Commission (“SEC” or “Commission”)
alleges as follows:
SUMMARY OF ACTION
1. This case arises out of a historic securities fraud perpetrated by senior executives
at SCANA Corporation and its subsidiary South Carolina Electric & Gas Company (“SCE&G”)
(jointly referred to as “SCANA”).  SCANA and its senior executives repeatedly deceived
investors, regulators, and the public over several years about the status of a $10 billion nuclear
energy project.  When the truth was revealed, it resulted in hundreds of millions of dollars in
losses to SCANA’s investors and to South Carolinians.
3:20-cv-00882-MGL

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2. The project at issue was the failed expansion of the Virgil C. Summer Nuclear
Station in Jenkinsville, South Carolina (“V.C. Summer”).  The planned expansion at V.C.
Summer was one of the largest and most expensive construction projects in South Carolina
history.  The project began in 2008 when SCANA, which already operated one nuclear unit at
V.C. Summer (Unit 1), announced its intention to build two new nuclear units at the plant (Unit 2
and Unit 3).  SCANA began constructing the new units in 2013, but the project was plagued by
substantial delays and cost overruns.  In July 2017, these problems were so pervasive that after
five years of planning and development, four years of construction, and a total of $9 billion
expended, SCANA abandoned the project without completing either new nuclear unit.
3. From 2015 through 2017, construction of the new nuclear units at V.C. Summer
was a tale of two projects.  Publicly, SCANA touted progress being made on the project in its
periodic filings with the SEC, on earnings calls with financial analysts, in press releases and
video presentations, and in filings and testimony before the South Carolina Public Service
Commission (“PSC”).  These false statements enabled SCANA to bolster its stock price, sell $1
billion in corporate bonds at favorable rates, and obtain regulatory approval to charge its
customers more than $1 billion in increased rates to help finance the project.  Internally,
however, SCANA knew that – contrary to its public statements – the project was significantly
delayed, the construction schedule was unreliable and unachievable, and the company was
unlikely to qualify for $1.4 billion in federal production tax credits because the new units would
not be completed by the January 1, 2021 deadline for receiving the tax credits.  SCANA and its
senior management knew that the expansion project was not viable without those tax credits.
4. SCANA’s senior management, including Defendants Kevin B. Marsh (“Marsh”)
and Stephen A. Byrne (“Byrne”), were at the center of this fraud.  Marsh was the Chief

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Executive Officer of SCANA and the Chairman of the Board of Directors for SCANA
Corporation and SCE&G.  He was directly involved in overseeing the expansion project at V.C.
Summer.  Byrne was SCANA Corporation’s Executive Vice President and SCE&G’s President
of Generation and Transmission and Chief Operating Officer.  Byrne’s responsibilities included
overseeing all nuclear operations for SCANA, including construction of the new nuclear units at
V.C. Summer.  As such, Marsh and Byrne were well aware of the delays in the project, the ongoing
problems with the schedule, and the likelihood that SCANA would not qualify for the tax credits.
5. Construction on the new nuclear units began in March 2013.  SCANA initially
projected that Unit 2 would be completed by 2016 and Unit 3 would be completed by 2019.  As
early as September 2013, however, the construction schedule was already delayed significantly.
Those delays continued throughout 2014.
6. By 2015, Westinghouse Electric Company (“Westinghouse”) – the lead contractor
on the project – had revised its schedule to have Unit 2 completed by June 2019 and Unit 3
completed by June 2020.  SCANA’s senior management knew, however, that the project was
substantially behind even this revised schedule, that the revised schedule was unreliable, and that
SCANA was unlikely to qualify for the federal production tax credits.
7. In fact, SCANA’s nuclear team, which Byrne oversaw, wrote in a memorandum
dated April 28, 2015: (i) Westinghouse “has no credibility for developing a realistic schedule;”
(ii) SCANA has “no confidence in [Westinghouse’s] ability to complete Unit 3 by the end of
2020 and suspects that production tax credits are in jeopardy for that unit;” and (iii) “[t]he
continued failure to meet schedule (Unit 2 now at least 39 months late, and Unit 3 at least 18
months late . . . ) has severely impacted credibility and has placed ongoing regulatory and
financial support in jeopardy.”  At that time, SCANA’s senior management also knew that at the

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current rate of progress only 30% of the project would be completed by 2020.
8. Despite knowing that the schedule was unreliable and the tax credits were at risk,
SCANA’s senior management publicly touted the construction schedule and the company
receiving $1.4 billion in federal tax credits for the expansion project.  For example, just two days
after receiving the above memorandum, Byrne misleadingly stated on SCANA’s first quarter
earnings call that “the [revised] construction schedule . . . includes a substantial completion date
of June of 2019 for Unit 2 and June of 2020 for Unit 3.”  Also, i  n May 2015, Byrne falsely
testified before the PSC (SCANA’s regulator):  “I can affirm that these schedules represent the
best and most definitive forecast of the anticipated costs and construction schedule required to
complete this project that is available[.]”  Marsh also testified before the PSC that the “current
schedules reflect the best information available about the anticipated costs and construction
timetables for completing the project,”  even though he knew those statements w ere not true.
9. Later in 2015, given the significant delays that had occurred to date, SCANA
retained Bechtel Power Corporation (“Bechtel”) to conduct a third-party assessment of the
project.  In October 2015, Bechtel presented its initial findings to SCANA’s senior management,
including Marsh and Byrne.  Bechtel stated that even under the best case scenario Unit 2 would
not be completed until between December 2020 and August 2021 and Unit 3 would not be
completed until between June 2022 and June 2023.  These projections meant that SCANA would
likely not qualify for some, or perhaps any, of the $1.4 billion federal tax credits.  Bechtel also
concluded that SCANA’s schedule for completing the expansion project was unrealistic.
10. SCANA and its senior management concealed the fact that the construction
schedule was unreliable and that the company likely would not qualify for some, or perhaps any,
of the $1.4 billion in tax credits.   Indeed, throughout the duration of the project, SCANA’s senior

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management, including Marsh and Byrne, failed to disclose these facts publicly.
11. Instead, in October 2015, SCANA announced that it had entered into an amended
agreement with Westinghouse and claimed that the new agreement resolved most of the
problems with the project.  Despite Bechtel’s finding that the completion of Unit 2 and Unit 3
would be delayed by 18 months to 3 years, however, the amended agreement moved the
completion dates for the new units back by just 60 days.  Less than one month after receiving
Bechtel’s findings, SCANA’s senior management, including Marsh and Byrne, testified before
the PSC regarding the amended agreement.  Their testimony contradicted what they had recently
been told by their own nuclear team and Bechtel.
12. The nuclear expansion project fell even further behind schedule in 2016.  As
SCANA’s nuclear team stated to SCANA’s senior management, including Marsh and Byrne:  “It
would be a good idea to encourage and recognize meaningful progress and successes.  This is
difficult to accomplish when the project is not seeing meaningful successes.”
13. Despite the deteriorating status of the project, SCANA’s senior management
continued making false and misleading statements to the public regarding the construction
schedule and the production tax credits.  For example, during SCANA’s first quarter earnings
call in April 2016, Byrne misleadingly touted significant progress being made on the project and
presented several photographs of the construction site that purported to show that progress even
though he knew the project had experienced additional delays.
14. By the summer of 2016, the nuclear expansion project at V.C. Summer had fallen
even further behind schedule.  On July 26, 2016, Byrne made a presentation at SCANA’s Board of
Director’s meeting that recognized substantial problems in “Five Project Focus Areas.”  Byrne
stated in the presentation, which was attended by Marsh:   “The majority of project milestones are

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not met on their scheduled dates.  The percentage of schedule activities completed on time is well
below the goal and does not allow for a reliable Integrated Project Schedule.”
15. On SCANA’s second quarter earnings call just two days later, however, Byrne
falsely stated:  “The guaranteed substantial completion dates remain at August of 2019 for unit 2
and August of 2020 for unit 3.  We don’t see anything to change those.”  Byrne’s false statements
had the desired effect, as analysts issued reports emphasizing the confidence SCANA’s senior
management had in completing Unit 2 and Unit 3 in time to qualify for the production tax credits.
16. By the end of 2016, SCANA and its senior management knew that the project was
hopelessly behind schedule, that the schedule from Westinghouse was unrealistic, and that the
company would not qualify for the federal production tax credits.  Despite this knowledge,
SCANA’s senior management kept making false and misleading statements regarding the
reliability of the construction schedule and the receipt of the tax credits.
17. The nuclear expansion project at V.C. Summer continued to experience severe
problems in 2017, and essentially collapsed in  the middle of that year.  Westinghouse (the lead
contractor on the project) declared bankruptcy, and SCANA determined that it would take several
more years and require substantial additional funding to complete construction of the new nuclear
units.  In July 2017, SCANA announced that it was abandoning the project, with construction of
the new nuclear units not even being half complete.
18. The failed nuclear expansion project at V.C. Summer had devastating consequences
for SCANA’s investors and customers.  Investors lost hundreds of millions of dollars when the
truth was revealed.  SCANA’s energy customers lost over $1 billion in higher rates that SCANA,
which was a regulated monopoly, had been allowed to charge them to help recoup the significant
financing costs associated with the nuclear expansion project.

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19. At least some executives at SCANA recognized the enormity of the fraud and the
consequences that would follow.  A SCANA executive wrote to a colleague that the failed
expansion project at V.C. Summer was due to “[e]go and un-attentiveness,”  and that the fallout
was “[g]onna be a blood letting the likes of which we have never seen.”  The SCANA executive
concluded:  We “got on our jet airplanes and flew around the country showing the same damn
construction pictures from different angles and played our fiddles while the whole mf [sic] was
going up in flames.”
20. By engaging in the conduct alleged in this Complaint, Defendants SCANA
Corporation, Dominion Energy South Carolina, Inc. (f/k/a SCE&G), Marsh, and Byrne
(collectively “Defendants”) violated and/or aided and abetted violations of Section 17(a) of the
Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)], Section 10(b) of the Securities
Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)], and Rule 10b-5 thereunder [17
C.F.R. § 240.10b-5].  In addition, Defendants SCANA Corporation and Dominion Energy South
Carolina (f/k/a SCE&G) violated, and Defendant Marsh aided and abetted the violations of,
Section 13(a) of the Exchange Act [15 U.S.C. § 78j(b)] and Rules 12b-20, 13a-1, 13a-11, and
13a-13 thereunder [17 C.F.R. §§ 240.12b-20, 240.13a-1, 240.13a-11, and 240.13a-13].  Finally,
Defendant Marsh violated Rule 13a-14 [17 C.F.R. § 240.13a-14].
JURISDICTION AND VENUE
21. The Commission brings this action pursuant to Sections 20 and 22 of the
Securities Act [15 U.S.C. §§ 77t and 77v] and Sections 21(d) and 21(e) of the Exchange Act [15
U.S.C. §§ 78u(d) and 78u(e)] to enjoin Defendants from engaging in the transactions, acts,
practices, and courses of business alleged in this Complaint, and transactions, acts, practices, and
courses of business of similar purport and object, for civil penalties, disgorgement plus

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prejudgment interest, an officer and director bar, and for other equitable relief.
22. The Court has jurisdiction over this action under Section 22 of the Securities Act [15
U.S.C. § 77v] and Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e),
and 78aa].
23. Venue is proper in this Court pursuant to Section 22(a) of the Securities Act [15
U.S.C. § 77v] and Section 27(a) of the Exchange Act [15 U.S.C. § 78a(a)].
24. A substantial part of the transactions, acts, practices, and courses of business
constituting violations of the Securities Act and the Exchange Act occurred within the jurisdiction
of the United States District Court for the District of South Carolina (Columbia Division), including
but not limited to fraudulent acts being committed and fraudulent statements being made by
Defendants in this judicial district.  In addition, Defendants SCANA Corporation and Dominion
Energy South Carolina, Inc. have their principal places of business in this judicial district, and
Defendants Marsh and Byrne reside in this judicial district.
25. Defendants, directly and indirectly, made use of the mails, and the means and
instrumentalities of interstate commerce in connection with the transactions, acts, practices, and
courses of business alleged in this Complaint.  Defendants, unless enjoined by this Court, will
continue to engage in the transactions, acts, practices, and courses of business alleged herein, and
in transactions, acts, practices, and courses of business of similar purport and object.
DEFENDANTS
26. SCANA Corporation is a South Carolina corporation engaged, through
subsidiaries, in electric and natural gas utility operations and other energy-related businesses.
SCANA Corporation’s principal place of business is located in Cayce, South Carolina.  At all
relevant times, SCANA Corporation’s securities were registered under Section 12(b) of the

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Exchange Act, it was a reporting company subject to the provisions of Section 13(a) of the
Exchange Act, and its stock was traded on the New York Stock Exchange (“NYSE”) under the
ticker symbol “SCG.”  In addition, SCANA Corporation was a regulated monopoly in South
Carolina.   In January 2019, SCANA Corporation was acquired by Dominion Energy, Inc.
(“Dominion”), with SCANA Corporation continuing as a surviving corporation and a wholly
owned subsidiary of Dominion.
27. Dominion Energy South Carolina, Inc. (f/k/a/ South Carolina Electric & Gas
Company) (“SCE&G”) is a wholly owned SCANA subsidiary and regulated public utility
engaged in the generation, transmission, distribution, and sale of electricity primarily in South
Carolina.  SCE&G’s securities were registered under Section 12(g) of the Exchange Act during
the relevant time period and it filed with the Commission combined annual and quarterly reports
with SCANA Corporation.  After the merger, SCE&G’s name was changed to Dominion Energy
South Carolina, Inc., but it remains a wholly owned subsidiary of SCANA Corporation operating
as a public utility.  Dominion Energy South Carolina, Inc. will be referred to as SCE&G in this
Complaint.  The company’s principal place of business is located in Cayce, South Carolina.  Its
securities are registered under Section 12(g) of the Exchange Act and it files independent
periodic reports with the Commission pursuant to Section 13(a) of the Exchange Act.  In this
Complaint, “SCANA” refers to SCANA Corporation and SCE&G collectively.
28. Kevin B. Marsh, age 64, is a resident of Irmo, South Carolina.  He received a
B.B.A. degree in Accounting from the University of Georgia.  Marsh joined SCANA in 1984
and, over the next 27 years, held various officer positions, including Chief Financial Officer and
Chief Operating Officer.  From December 2011 until December 2017, Marsh served as t he Chief
Executive Officer of SCANA Corporation and SCE&G and Chairman of the SCANA

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Corporation and SCE&G Board of Directors.  As the CEO of SCANA, Marsh’s responsibilities
included overseeing the nuclear expansion project at V.C. Summer, and he was personally
involved in the project.  Marsh received substantial compensation while working at SCANA,
including millions of dollars in bonuses during the relevant time period.  Marsh’s compensation
and bonuses were tied, at least in part, to his oversight of the expansion project at V.C. Summer.
29. Stephen A. Byrne, age 59, is a resident of Isle of Palms, South Carolina.  Byrne
received a B.S. degree in Chemical Engineering from Wayne State University.  He joined
SCE&G in 1995 as the Plant Manager at the V.C. Summer plant, and he later became the
company’s Chief Nuclear Officer.  From 2012 until January 2018, Byrne was an Executive Vice
President of SCANA and President of Generation and Transmissions and Chief Operating
Officer of SCE&G.  His responsibilities included overseeing all nuclear operations for SCANA,
including construction of the two new nuclear units at V.C. Summer.  Byrne received substantial
compensation while working at SCANA, including millions of dollars in bonuses during the
relevant time period.  Byrne’s compensation and bonuses were tied, at least in part, to his oversight
of the expansion project at V.C. Summer.  Byrne reported to Marsh.
OTHER RELEVANT ENTITIES
30. Dominion Energy, Inc., is a Virginia corporation and one of the nation’s largest
producers and transporters of energy.  Dominion’s securities are registered with the Commission
under Section 12(b) of the Exchange Act and its stock trades on the NYSE under the ticker
symbol “D.”  As of February 2020, Dominion’s market capitalization exceeded $70 billion.
31. The South Carolina Public Service Commission is a publicly elected executive
board that regulates utility rates in South Carolina.  The PSC regulated the rates that SCANA
charged its approximately 700,000 electricity customers in the state and also regulated the fixed

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assets that were invested in SCANA’s business so that utility service could be provided to the
company’s customers.  During the relevant time period, the PSC held public hearings on
SCANA’s rate petitions and also maintained a website where many of the false and misleading
statements made to the regulatory body were accessible by the public.
32. Office of Regulatory Staff (“ORS”), is South Carolina’s public utility oversight
agency that had the dual mission of representing the public interest of South Carolina in utility
regulation and at the same time advancing the interests of utilities in the state.  ORS periodically
reported to the PSC on the V.C. Summer expansion project.
33. South Carolina Public Service Authority (a/k/a Santee Cooper) is a state-owned
public utility that provides electricity to customers in South Carolina.  Santee Cooper’s principal
place of business is Moncks Corner, South Carolina.
FACTS
SCANA’s Nuclear Expansion Project at V.C. Summer

34. In 2005, SCANA concluded that to meet the future energy demands of its
customers the company needed to increase its base load generation capacity – i.e., it would need
to generate more power.   SCANA sought proposals from various nuclear generation construction
firms on the best way to meet the energy needs of its customers over the coming decades.
35. After considering various proposals, in May 2008, SCANA and Santee Cooper
agreed to build two new 1,117-megawatt AP1000 Advanced Passive Safety Power Plants as part
of an expansion of the V.C. Summer Nuclear Station located in Jenkinsville, South Carolina.
36. SCANA and Santee Cooper split ownership of the expansion project, with
SCANA taking a 55% ownership stake and Santee Cooper taking the remaining 45% share.
SCANA’s majority ownership stake allowed it to control the daily operations and management

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of the expansion project at V.C. Summer.
37. SCANA already had an existing nuclear unit in operation at V.C. Summer known
as Unit 1.  The two new nuclear units were known as Unit 2 and Unit 3.
38. SCANA selected Westinghouse Electric Company to be the lead contractor on the
project.  On May 23, 2008, SCANA signed an Engineering, Procurement, and Construction
agreement with Westinghouse (“EPC Agreement”).   In this Complaint, “Westinghouse” refers to
Westinghouse Electric Company and the other companies working with it on the expansion
project.
39. Westinghouse agreed to design, engineer, and construct the new nuclear units.
The EPC Agreement provided that Unit 2 would be completed by April 1, 2016, and Unit 3
would be completed by January 1, 2019.  The new units had a life expectancy of sixty years.
40. The total cost for the nuclear expansion project at V.C. Summer was originally
estimated at $9.8 billion.  SCANA’s share of the cost (55%) was approximately $5.4 billion and
Santee Cooper’s share of the cost (45%) was approximately $4.4 billion.
41. The nuclear expansion project at V.C. Summer was the largest capital project
undertaken in SCANA’s history.
42. At the time, SCANA had approximately $12 billion in assets, $4.2 billion in
annual revenues, and a market capitalization of around $4.5 billion.
43. SCANA was unable to finance directly the enormous costs of the nuclear
expansion project.   Instead, SCANA relied on a South Carolina law called the Base Load Review
Act (“BLRA”) to help offset the costs of the project.
44. The BLRA enabled SCANA to apply to the PSC (its regulator) for permission to
raise rates on its customers to recoup the cost of capital associated with construction of the new

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units.  SCANA was able to charge its customers over $1 billion in higher rates over the course of
the project.  SCANA’s customers had to pay the higher rates because SCANA is a monopoly.
45. The BLRA provided, however, that SCANA could be held responsible for any
costs that were incurred “imprudently.”  Specifically, if the PSC determined that SCANA had
not prudently managed the nuclear expansion project, the PSC could disallow the recovery of
increased rates from the company’s customers.
46. The BLRA also required SCANA to submit detailed information to the PSC to
justify any additional rate increases on its customers.  Among other information, the BLRA
required SCANA to file quarterly reports that detailed the progress of construction on the new
nuclear units, the costs of the project, and the scheduled completion dates for the new units.
SCANA regularly published the BLRA Quarterly Reports on its website.
47. In addition to the PSC, the ORS also regulated SCANA.  The ORS is empowered
to audit, inspect, and examine public utilities within the state, including SCANA.
48. The ORS’s audit function included both financial matters and construction
progress related to the expansion project at V.C. Summer.  In particular, under the BLRA, the
ORS was charged with conducting ongoing monitoring of the construction of the new nuclear
units and the expenditure of capital on the project.
49. On May 30, 2008, SCANA submitted a petition to the PSC under the BLRA.
SCANA requested that the PSC approve a Base Load Review Order to construct and operate the
two new units at V.C. Summer.  Byrne submitted testimony in support of SCANA’s petition.
50. In approving SCANA’s petition, the PSC noted that the “definitive substantial
completion deadlines for Unit 2 and 3 [were] April 1, 2016 and January 1, 2019.”
51. The PSC also noted that “[o]ne important consideration concerning the

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reasonableness and prudence of the construction plan is how [SCANA] intends to oversee that
construction to protect its interests and the interests of its customers.”  In its approval order, the
PSC specifically referenced Byrne’s testimony that SCANA would provide comprehensive
oversight of the expansion project.  The PSC also made clear that, given the enormous costs of
constructing Unit 2 and Unit 3, it was imperative that SCANA prudently manage the project.
52. The costs of constructing the new nuclear units were not covered by the BLRA.
To help pay for the construction of Unit 2 and Unit 3, SCANA sold $1 billion in first mortgage
bonds ($500 million in May of 2015 and another $500 million in June of 2016).
Federal Production Tax Credits
53. In enacting the Energy Policy Act of 2005, Congress established production tax
credits to incentivize the construction of new nuclear facilities in the United States.  The tax
credits were limited to the first 6000 megawatts of new nuclear capacity, and were structured to
offset the high costs of starting a new nuclear facility over the first eight years of operation.
54. To qualify for the production tax credits, newly constructed nuclear units had to
be producing power by January 1, 2021.
55. As a result of the Energy Policy Act, SCANA would qualify for production tax
credits estimated at $85,937,500 annually per unit, or $1.4 billion in total, over 8 years.  SCANA
would only receive these production tax credits, however, if Unit 2 and Unit 3 were completed
by January 1, 2021.  SCANA would not qualify for the federal production tax credits if the new
units were not completed by January 1, 2021.
56. SCANA’s receipt of the production tax credits for both Unit 2 and Unit 3 was a
core component of SCANA’s strategic vision and business model.  SCANA touted the
importance of receiving the production tax credits to maintaining regulatory and financial

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support for the nuclear expansion project.  In fact, SCANA described the receipt of production
tax credits as a “strategic imperative” for the company.  At all relevant times, SCANA’s ability
to receive the production tax credits was important to investors as well as other members of the
financial community because the funds would mitigate the costs that rate payers would bear for
the project and, in turn, SCANA would maintain a supportive regulatory environment that
allowed it to raise rates.   SCANA’s receipt of the tax credits was also important to the PSC,
which directed SCANA to complete Unit 2 and Unit 3 in time to receive the federal tax credits.
57. SCANA and its senior executives, including Marsh and Byrne, knew the
importance of the company qualifying for and receiving the federal production tax credits to the
viability of the nuclear expansion project at V.C. Summer.
The Expansion Project Experiences Significant Delays and Cost Overruns

58. Construction on the new nuclear units began in March 2013.
59. As early as September 2013, it was apparent that the V.C. Summer expansion
project was already delayed significantly.  By that time, SCANA had submitted several update
petitions to the PSC to modify the original construction schedules and the completion dates for
Unit 2 and Unit 3.  SCANA requested that the PSC approve a revised schedule in which Unit 2
would be completed by March 15, 2017, and Unit 3 would be completed by May 15, 2018.
60. The construction delays on the project continued throughout 2014.  By August
2014, Westinghouse had produced a new Revised, Fully Integrated Construction Schedule for the
project.  The new schedule had preliminary completion dates of late 2018 or the first half of 2019
for Unit 2.  Westinghouse indicated that it would complete Unit 3 twelve months later (i.e., by late
2019 or the first half of 2020).
61. SCANA’s senior management, including Marsh and Byrne, knew about these

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scheduling delays and Westinghouse’s revised completion dates for Unit 2 and Unit 3.
SCANA’s Senior Management’s Concerns That Westinghouse
Would Not Complete the New Nuclear Units by the Revised Dates

62. In light of the significant problems plaguing the project, SCANA and Santee
Cooper began contemplating an independent third-party assessment of the project.  On August 7,
2014, SCANA executives, including Marsh and Byrne, along with representatives from Santee
Cooper met with representatives from Westinghouse to discuss the scheduling delays.  At the
meeting, Byrne told Westinghouse that SCANA and Santee Cooper wanted an independent review
of the revised schedule performed because they questioned whether Westinghouse could complete
the new nuclear units by the revised dates.
63. After further discussion, Westinghouse acknowledged that it would not meet the
2018 completion date for Unit 2.  Westinghouse claimed, however, that it could complete Unit 2
by June 2019 and Unit 3 by June 2020.
64. SCANA’s senior management, including Marsh and Byrne, doubted
Westinghouse’s representations regarding the construction schedule and the reliability of that
schedule.  As Marsh noted in an earlier letter to Westinghouse:  “You have made promise after
promise, but fulfilled few of them.”
65. On December 10, 2014, Marsh and Byrne met with representatives from
Westinghouse.  According to Byrne’s notes from the meeting, Byrne told the representatives from
Westinghouse that he did not have confidence in their schedule for completing Unit 2 and Unit 3
based on the history of delays on the project.
66. On January 6, 2015, SCANA convened an internal meeting to discuss how to move
forward with Westinghouse on the project in light of the substantial delays in construction on Unit
2 and Unit 3.  Byrne attended the meeting and his notes reflect that Westinghouse was “not

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meeting critical milestones to achieve June 2019” completion for Unit 2.
67. Byrne was correct that Westinghouse was not meeting critical milestones on the
project.  In fact, Westinghouse was chronically underperforming on constructing Unit 2 and Unit 3.
SCANA’s senior management, including Marsh and Byrne, knew that Westinghouse failed month
after month to meet various performance metrics that measure the site’s efficiency and progress
and indicated whether the project could (or would) be completed under the established schedule.
68. The main metric for showing whether the project would be completed in
accordance with the schedule and in time for SCANA to receive the production tax credits was the
“overall construction complete” and the “monthly percent complete.”  This number was generated
by taking how much construction work had been completed on the project and then dividing the
remaining balance of work to be done by the number of months outstanding prior to the
scheduled completion date (or the production tax credit deadline of January 1, 2021).
69. The main metric for measuring construction site efficiency was the performance
factor, which is a ratio of actual time versus the planned amount of time labor spends doing a
particular task.  A higher performance factor equates to less efficient labor.  For instance, a
performance factor of 1.0 means that it took as many labor hours to complete a task as was
planned.  A performance factor of 2.0 means that it took twice as many labor hours as were
planned to complete a task.
70. The revised schedule assumed that Westinghouse would achieve a performance
factor of 1.15, even though Westinghouse had never achieved an efficiency level that low during
the years that it had been working on the project.
71. On January 7, 2015, SCANA executives, including Byrne, met again with
representatives from Westinghouse.  According to Byrne’s notes from the meeting, a

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Westinghouse representative opened the meeting by stating that June 2019 and June 2020 were
the most “realistic” completion dates for Unit 2 and Unit 3.  A Westinghouse representative then
asked whether SCANA believed the revised schedule for the new nuclear units was realistic.
Byrne’s own notes reflect that he answered, “No.”
72. On February 16, 2015, SCANA’s senior executives, including Marsh and Byrne,
met with representatives from Santee Cooper to discuss retaining an independent company to
perform a third-party assessment of the project.
73. By March 2015, the expansion project at V.C. Summer was even further behind
schedule.  For the last six months of 2014, the overall performance factor was around 1.8, and in
January 2015 it was 1.5.  By February 2015, the performance factor had increased to 2.37 –
meaning that it was taking more than twice as many labor hours to complete a task as planned.
74. The overall construction complete percentages were equally dismal, showing that
only about 15% of the project was completed   at that time and at the current rate of progress only
about 30% of the project would be completed by July 2019.
75. On March 6, 2015, SCANA and Santee Cooper executives attended a meeting
regarding the lack of progress on completing construction of Unit 2 and Unit 3.  At the meeting,
they discussed the overall construction complete percentage and the performance factor, both of
which showed that Westinghouse’s revised schedule was not credible or achievable.
 SCANA’s March 12, 2015 Petition to the PSC

76. SCANA filed a petition with the PSC on March 12, 2015, asking it to approve yet
another revised schedule that had Unit 2 being completed by June 19, 2019, and Unit 3 being
completed by June 16, 2020.  SCANA’s senior executives knew that this revised schedule was
not reliable.  SCANA’s petition also anticipated increased costs of nearly $700 million.

19

77. SCANA’s petition falsely stated that “substantial progress has been made towards
completion of the Units.”   In terms of the tax credits, SCANA falsely wrote that:  “Based on the
current construction schedules and assuming current tax law, [SCANA] anticipates that
additional Federal Production Tax Credits will be available for the Units that will provide
customers with $1.2 billion in additional benefits compared to projections made in 2008.”
78. In its petition, SCANA also falsely stated that “the Revised, Fully Integrated
Construction Schedule and Revised Cash Flow Forecast presented here are based upon [its] most
current review and analysis of the information provided.”  In fact, SCANA’s nuclear team,
including Byrne and Marsh, knew that the revised schedule was not reliable.
79. SCANA also emphasized that the company “has been able to obtain low-cost
borrowing for project costs based on [its] favorable bond ratings and the low cost of financing
available in debt markets” and that “customers are anticipated to save $1.2 billion in interest
costs over the life of the debt[.] ”
80. SCANA’s statements to the PSC, including its petitions, were made publicly
available shortly after they were filed.  Investors viewed a supportive regulatory environment in
South Carolina as important to maintaining SCANA’s stock price and credit rating because a loss
of support from the PSC would lead to elevated interest rates for SCANA’s bonds and a drop in
equity prices for SCANA.
81. In addition, on March 12, 2015, SCANA filed a Form 8-K with the SEC
announcing that it had submitted the petition with the PSC and attached a copy of the petition.  On
the same day, SCANA published a press release that referred to the update petition and then
misleadingly stated:  “The construction schedule reflected in the petition, without consideration of
all mitigating strategies, indicates a substantial completion date for Unit 2 of June 2019 and a

20

substantial completion date for Unit 3 of June 2020.”  Marsh also misleadingly claimed that
“[s]ubstantial progress has been made towards the completion of the units” and that SCANA
“expect[s] more production tax credits” than the company initially thought it would receive.
82. On March 30, 2015, SCANA’s senior executives, including Marsh and Byrne,
attended an internal Risk Management Committee meeting where it was decided that there was an
“increased risk” that the company would not qualify for the federal tax credits because the new
nuclear units might not be completed by January 1, 2021.  SCANA and its senior executives did
not disclose that information to the PSC or to investors.
83. Instead, in SCANA’s BLRA Quarterly Report for the quarter ending March 31,
2015, SCANA misleadingly touted that the “Revised, Fully-Integrated Construction Schedule
provides a new substantial completion date for Unit 2 of June 19, 2019, and a new substantial
completion date for Unit 3 of June 16, 2020.”  SCANA also falsely claimed that the company
would “monitor closely . . . the cost and schedule for the project” and “will continue to update the
[PSC] and the ORS of progress and concerns as the project proceeds.”  SCANA’s BLRA Quarterly
Report was made publicly available on its website shortly after it was filed.
 Defendants Make False Statements and Omit Material Information
 in SCANA’S First Quarter Earnings Call and Form 10-Q Filing

84. On April 6, 2015, Byrne received an e-mail from Santee Cooper’s Senior Vice
President for Nuclear Energy regarding the schedule delays and cost overruns on the expansion
project.  The e-mail reiterated what had been discussed at the March 6 meeting and included
several charts as attachments that visually depicted the lack of progress on the project.
85. The e-mail noted that, in terms of cost, the attachments did not include a “total cost
curve” chart because, based on the “actual numbers recorded on the project over the 5 month
period (Sept 2014 – Jan 2015),” such a curve “would be off the chart.”

21

86. In terms of schedule, one of the charts made clear that the new units were nowhere
close to being completed.  The chart showed that only around 15% of the project had been
completed and that at the current rate of progress only 30% would be completed by July 2019.
87. Specifically, Byrne received the following chart entitled, “Percent Complete –
Direct Craft Work.”  The chart showed the percent of direct craft work (i.e., skilled labor) that
would be completed at the current rate of progress and the improvement that would be necessary to
achieve the proposed June 2019 and June 2020 substantial completion dates (“SCDs”) that
SCANA had represented to the PSC.  The chart reflected that the new units would not be finished
by the dates that SCANA had publicly touted:

88. On April 21, 2015, Marsh attended a meeting with Santee Cooper.  Marsh’s notes

22

from the meeting state that the “current pace won’t achieve 2020.”  Marsh was referring to the fact
that at the current rate of progress construction of the new units would not be completed in time for
SCANA to qualify for the federal production tax credits.
89. In April 2015, Byrne was also involved in the preparation of a memorandum for an
upcoming meeting between the CEOs of SCANA and Santee Cooper.
90. On April 28, 2015, Byrne received an e-mail from his nuclear team in preparation
for that meeting which included a “CEO Talking Points” memorandum as an attachment.  The
CEO Talking Points memorandum listed numerous “schedule concerns” that SCANA and Santee
Cooper had regarding the nuclear expansion project.
91. Specifically, the memorandum stated:
• Westinghouse “has no credibility for developing a realistic schedule”;
• Westinghouse “continues to fail on executing critical work path”;
• “The cumulative direct craft productivity factor (PF) has gotten worse every
month for the past two years”;
• “In the last 2 years, less than 8% of direct work has been completed”;
• “And despite the negative trend in craft productivity, in the next 4-1/2 years,
84% will need to be completed to meet the Jun 2019/June 2020 SCDs”;
• SCANA and Santee Cooper have “no confidence in [Westinghouse’s] ability
to complete Unit 3 by the end of 2020 and suspect[]    that production tax
credits are in jeopardy for that unit”; and
• “The continued failure to meet schedule (Unit 2 now at least 39 months late,
and Unit 3 at least 18 months late . . . ) has severely impacted credibility and
has placed ongoing regulatory and financial support in jeopardy.”

23

92. The memorandum further stated that Westinghouse “has no credibility for
developing a realistic cost estimate.”
93. In conclusion, the memorandum stated that “Production Tax Credits are at risk”;
“Financing Costs are at risk for increasing”; and “BLRA rate recovery is at risk.”
94. When asked by a SCANA executive how these conclusions could be reconciled
with SCANA’s recent petition to the PSC, a member of SCANA’s new nuclear team responded:
“Respectfully, there is no way to comment on these talking points and remain consistent with the
recent PSC filing.  This is more like a tale of two projects.”
95. On April 30, 2015, SCANA held its first quarter earnings call and webcast.  Byrne
had received the “CEO Talking Points” memorandum just two days earlier.
96. On the call, Byrne misleadingly stated that “[t]he construction schedule, without
consideration of all mitigating strategies, includes a substantial completion date of June of 2019 for
Unit 2 and June of 2020 for Unit 3.”  At the time that Byrne made this statement, he knew that the
construction schedule was unreliable and that neither Unit 2 nor Unit 3 would be completed by
those dates at the current rate of progress.
97. An analyst then asked Byrne, “what you might think might happen with nuclear
PTCs.  I know you’re coming up against the time clock . . . .”
98. Byrne falsely responded:  “We believe that, and I think it was outlined in our
filings, that we will actually be qualifying for more production tax credits tha[n] we had
originally anticipated in our original filing.  So that’s a positive aspect.  And we will –   we
fully anticipate that [Westinghouse] will be able to bring the plants in by June of 2019 and
June of 2020 for the second unit.  So the production tax credits, and you qualify for them by
having the plant in service by the end of 2020.  So while I am not satisfied with only having

24

about six months’ margin, we do believe there are some opportunities, particularly on that
trailing unit, or Unit 3, for us to bring that in a little bit earlier.”  [Emphasis added].
99. Byrne’s statements in response to the analyst’s question regarding the schedule and
the production tax credits were false and misleading.  He knew that Westinghouse’s schedule was
not reliable and that SCANA likely would not qualify for some, or perhaps any, of the tax credits.
100. In conjunction with the earnings call, SCANA prepared and released a PowerPoint
presentation.  Byrne’s name is listed on the first page and he referred to the PowerPoint
presentation on the earnings call.
101. The presentation references SCANA’s March 2015 petition to the PSC, and falsely
states that the “New In Service Dates” for Unit 2 is “June 19, 2019” and for Unit 3 is “June 16,
2020.”
102. SCANA posted the transcript from the earnings call and the PowerPoint
presentation on its website.  In addition, investors were allowed to listen to the earnings call.
103. On May 8, 2015, SCANA filed a Form 10-Q with the SEC.
104. SCANA’s Form 10-Q stated that the nuclear production tax credits “could total as
much as approximately $1.4 billion.”  SCANA failed to disclose that its new nuclear team,
including Byrne and Marsh, knew that Westinghouse would not complete Unit 2 or Unit 3 in
accordance with the revised schedule.
105. SCANA’s Form 10-Q further stated, falsely, that “Based on the above substantial
completion dates provided by [Westinghouse] of June 2019 and June 2020 for Units 2 and 3,
respectively, both New Units are expected to be operational and to qualify for the nuclear
production tax credits; however, further delays in the schedule or changes in tax law could
impact such conclusions.”  At this time, SCANA and its senior management, including Marsh

25

and Byrne, knew that based on the current rate of progress the new nuclear units were not likely
to be completed in time to qualify for the production tax credits.  SCANA and its senior
management, including Marsh and Byrne, also knew that there would be substantial additional
delays and that the revised schedule was not reliable.
106. SCANA’s Form 10-Q omitted the true status of the nuclear expansion project,
including the unreliability of the schedule and the serious doubts about the new units qualifying for
the production tax credits.
107. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the
Sarbanes-Oxley Act, Marsh certified that he had reviewed the periodic filing and that it contained
no untrue statements.  Marsh knew that his certification was false and misleading.
108. Similarly, Byrne knew that the information in SCANA’s periodic filing was false
and misleading.  Nevertheless, on May 8, 2015, Byrne signed a sub-certification letter in
connection with the filing that falsely stated he had “no knowledge of any fraud or suspected fraud
affecting SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form
10-Q.
 SCANA Issues $500 Million in First Mortgage Bonds in May 2015
109. As a result of the BLRA and the increased rates approved by the PSC, SCANA was
receiving substantial payments from ratepayers in South Carolina to help finance the nuclear
expansion project.
110. By 2015, however, SCANA’s capital expenditures on the project were estimated at
over $1 billion annually.  The company needed additional funds to continue the project.
111. On October 15, 2012, SCANA filed with the SEC an Automatic Shelf Registration
statement on Form S-3ASR to register the sale of first mortgage bonds.  The Form S-3ASR

26

registration statement incorporated by reference certain prior filings and all subsequently filed
periodic reports filed by SCANA, including the periodic reports discussed in this Complaint.
Marsh signed the Form S-3ASR.
112. On or about May 19, 2015, SCANA issued $500 million in First Mortgage Bonds.
The First Mortgage Bonds matured in June 2065 and had an interest rate of 5.10%.  Marsh and
Byrne knew about the bond offering and the representations incorporated into the registration
statement.
113. SCANA’s preliminary prospectus supplement for the First Mortgage Bonds
incorporated by reference the company’s recent Form 10-Q and its updated petition with the PSC.
Those documents were materially misleading regarding the construction schedule and the
likelihood that SCANA would qualify for the production tax credits.
114. In addition, the preliminary prospectus supplement failed to disclose that SCANA
and its senior executives, including Marsh and Byrne, knew that the construction schedule within
the preliminary prospectus was unrealistic.
115. SCANA’s bonds were given an “A-” rating by Fitch Ratings, Inc. (“Fitch”).  As
one of its “key rating drivers,” Fitch noted that “under the current schedule the substantial
completion date of Unit 2 is June 2019 with the substantial completion of Unit 3 expected 12-
months later.”   Fitch further noted that the PSC’s “approval of the [March 2015 petition] is
critical to maintaining existing ratings” and that SCANA’s “ability to fully recover future
construction costs will be dependent on the PSC’s assessment of its March 2015 petition.”
116. Fitch made clear that its A- bond rating rested on the “key assumption” that the
PSC would approve SCANA’s update petition.  Fitch also opined that “[w]hile not expected, any
change in the BLRA process that affects the timeliness and amount of nuclear cost recovery

27

would adversely affect current ratings.”
117. SCANA ultimately sold the $500 million in First Mortgage Bonds.
118. The funds raised by SCANA were used primarily for the nuclear expansion project
at V.C. Summer.
119. At this time, SCANA had a market capitalization of around $7.5 billion.
Defendants Make False and Misleading Statements In Support of the PSC Petition
120. On May 26, 2015, SCANA submitted written testimony from its senior executives
to the PSC in support of the update petition.  This testimony was publicly available shortly after it
was filed and could be accessed from the PSC’s website.
121. In his written testimony, Marsh specifically referenced SCANA’s recent bond
offering, which had been made just one week earlier.  Marsh testified that selling all of the bonds
required a “slight nudge upward in the interest rate to bring the book of potential buyers from $400
million to the expected $500 million.”
122. Marsh stated that, according to several investment banking firms involved in the
transaction, “an important factor for many potential buyers was their concern over regulatory risk
related to the current filing.  Bond buyers have options.  If bond buyers have concerns about
[SCANA’s] risk profile, it is often just as easy for them to buy bonds of companies that do not face
such risks as to buy [SCANA’s] bonds.”  Marsh noted that the “market is becoming increasingly
sensitive to [SCANA’s] regulatory risk in the nuclear context” and that the “risk of losing market
support for our financing plan is real.”
123. Marsh also explained that 2015-2017 was a “critical time” for SCANA’s financing
of the expansion project.  He said that “during this three year period, [SCANA] will not have the
option of waiting out unfavorable conditions in the capital markets[.]”  Rather, “during this time, it

28

will be vitally important that [SCANA] maintain access to capital markets on favorable terms.”
124. In addition to talking about the recent bond offering, Marsh also testified about the
construction schedule, falsely stating:  “The cost and construction schedules presented for
approval here are no different from those approved in 2008 and in each update docket thereafter.
In each case, the Company came before the Commission with the best information available
concerning the anticipated construction schedule for completing the Units and the anticipated
costs associated with that schedule.”
125. Marsh also falsely testified:  “In every case, both the cost and construction
schedules presented and approved have been anticipated schedules for completing the Units . . .
The current schedules [submitted in this update petition] reflect the best information available
about the anticipated costs and construction timetables for completing the project . . . [SCANA]
has ‘approved’ these updated schedules in the sense that it recognizes them to be the most
accurate and dependable statements available of the anticipated construction schedule for
completing the Units and the anticipated schedule of capital costs for completing the Units . . .
[SCANA] has carefully reviewed the data provided by [Westinghouse] and verified its
reasonableness.”
126. Marsh also testified falsely about SCANA’s receipt of production tax credits:  “In
2008, [SCANA] anticipated its total benefit would be $1.06 billion gross of tax.  Now it appears
that there will be a smaller number of competing utilities so that [SCANA] will receive a larger
amount of credits.  Assuming that the current completion dates can be maintained, [SCANA’s]
forecasted benefit has increased by approximately $1.2 billion in future dollars since 2008.”
127. Byrne also provided false written testimony to the PSC regarding the status of the
nuclear expansion project and the reliability of the construction schedule.

29

128. Byrne falsely testified:  SCANA “determined in March 2015 that the cost and
construction schedules as updated by [Westinghouse] through that time were in fact the anticipated
schedules for completion of the project as envisioned by the BLRA.”  Byrne went on to say,
falsely, that the schedules “are reasonable and prudent schedules for completing the project [and]
[t]hey should be approved.”
129. Byrne concluded by falsely stating:  “I can affirm that these schedules represent
the best and most definitive forecast of the anticipated costs and construction schedule required
to complete this project that is available as of the date of this filing of the testimony.  These
updated costs are not in any way the result of imprudent management of the project by” SCANA.
130. In reality, the current schedule before the PSC did not reflect the “best” or “most
definitive” information available.  To the contrary, SCANA and its senior management knew that
the revised schedule was unreliable and that, at the current rate of progress,  the new nuclear units
would not be completed in time to receive the production tax credits.  SCANA and its senior
management also failed to disclose to the PSC that they and Santee Cooper had decided to have an
independent third-party assessment performed in light of the schedule delays to date and the
unreliability of what Westinghouse, the lead contractor, was telling them.
131. In June 2015, SCANA’s and Santee Cooper’s nuclear teams prepared another
“CEO Meeting Talking Points” memorandum for an upcoming meeting with Westinghouse.
132. The memorandum stated that:  “Completion of the [Westinghouse] AP1000 design
has been a significant project challenge affecting procurement and construction.  The incomplete
design of the AP1000 has resulted in 3–4 years of inefficient (and very poor) site execution.  As a
result, [Westinghouse] has not been able to achieve success on any schedule or cost estimate to
date.  These issues have created a significant question of [Westinghouse’s] credibility

30

regarding the delivery of the project.”  [Emphasis added].
133. The memorandum further noted that the continued failure to meet milestones has
placed the “regulatory and financial support in jeopardy” and, for SCANA, put the “production tax
credits in jeopardy.”  In short, SCANA and Santee Cooper had “little confidence in
[Westinghouse’s] ability to complete Unit 3 by the end of 2020.”  [Emphasis added].
134. In terms of cost, the memorandum noted that Westinghouse “has little credibility
for developing a realistic cost estimate.”
135. On June 5, 2015, representatives from SCANA’s nuclear team and Santee Cooper
met with representatives from Westinghouse to discuss the status of the project.  SCANA and
Santee Cooper notified Westinghouse that they planned to have an independent third party evaluate
the project.
136. Marsh and Byrne knew of the planned third-party assessment, the reasons for
requesting it, and that it was discussed with Westinghouse.  In fact, they were both sent notes from
the meeting.  Neither Marsh nor Byrne, however, publicly disclosed the planned third-party
assessment or that SCANA’s nuclear team had concluded that Westinghouse’s schedule was not
reliable.
137. Instead, SCANA filed a BLRA Quarterly Report for the period ending June 30,
2015, that touted the same unreliable construction schedule and made the same false and
misleading statements regarding SCANA’s oversight of the project and its candor with the PSC
and the ORS as its earlier report.
138. On July 21, 2015, the PSC held a public hearing on SCANA’s update petition.
139. Marsh testified that his pre-filed written testimony, with three minor exceptions,
had not changed.  Marsh went on to testify that he was “directly involved in the management and

31

oversight of the new nuclear project” and he reiterated that “the projected benefit for federal
production tax credits . . . has increased by approximately $1.2 billion.”
140. In terms of the schedule, Marsh falsely testified:  “The schedule we have put before
the Commission is a schedule we are working to, on site, now, to complete the units.  So we have
agreed this is the working schedule to complete the units, as we presented to the Commission. . . .
There is no dispute that this is the schedule upon which the plants are being built.”  Marsh failed to
disclose that he and other SCANA executives knew that the schedule was unreliable and that the
company would not qualify for the production tax credits at the current rate of progress.
141. In addition, Marsh testified:  “Nothing is more important to SCE&G’s financial
plan than maintaining market confidence and the continued application of the BLRA in a fair and
consistent way.  Loss of this confidence would put the financial plan for completing the units at
risk.”  Marsh’s testimony was available to the public.
142. Byrne also testified at the July 21, 2015 PSC hearing.  He testified that his pre-filed
written testimony had not changed.
143. Byrne then testified, falsely, that:  “In March of 2015, [SCANA] determined that
the updated costs and construction schedule from [Westinghouse and its sub-contractor] were, in
fact, accurate schedules for completion of the project as envisioned by the BLRA. . . The costs and
construction schedules submitted here are well reviewed, well documented, and reflect reasonable
and accurate schedules for the project based on information to date.  They are not the result of
imprudence by [SCANA] in any way.  As with any complex project, however, these schedules are
likely to change; but based on current information, they are appropriate for approval as the new
BLRA schedules for this project.”  Byrne’s testimony was available to the public.
144. In September 2015, the PSC approved SCANA’s update petition.  The PSC relied

32

on testimony from Marsh and Byrne in finding that the new schedule was “a reasonable and
prudent plan for completing construction of the Units given the information available at this time.”
145. SCANA issued a press release announcing the PSC’s decision.  In the press release,
SCANA falsely stated that “[t]he construction schedule approved today, without consideration of
all mitigating strategies, indicates substantial completion dates of June 2019 and June 2020 for
Units 2 and 3, respectively.”  SCANA also filed a Form 8-K on September 2, 2015, that included
the press release as an attachment.
146. On September 30, 2015, the PSC approved SCANA’s revised rate petition, which
the company had submitted shortly after issuing the $500 million in First Mortgage Bonds.
Specifically, the PSC granted SCANA a rate increase of over $64 million in annual retail revenue.
Defendants Retain Bechtel, Disguise Hiring Bechtel From Regulators, and Then
Contradict Bechtel’s Findings in Public Filings and Testimony Before the PSC

147. On August 6, 2015, because of the significant delays that had occurred to date,
SCANA, through its counsel, retained Bechtel Power Corporation to conduct an independent
assessment of the nuclear expansion project at V.C. Summer.  Bechtel is an internationally
known engineering, procurement, construction, and project-management company based in
Virginia.  Bechtel has worked on mega-projects for over 80 years, including construction of the
Hoover Dam in Nevada.
148. Bechtel was paid $1 million for its assessment of the expansion project at V.C.
Summer.
149. Marsh and Byrne knew that Bechtel had been hired to evaluate the expansion
project at V.C. Summer because the project was significantly behind schedule.
150. Bechtel’s field work and analysis took around two months to complete.  Bechtel’s
work included meeting with Byrne to discuss the expansion project.

33

151. On August 7, 2015, SCANA filed a Form 10-Q with the SEC.
152. SCANA’s Form 10-Q stated that the nuclear production tax credits “could total as
much as approximately $1.4 billion.”  SCANA failed to disclose that its new nuclear team,
including Byrne and Marsh, knew that Westinghouse would not complete Unit 2 or Unit 3 in
accordance with the revised schedule and that the schedule was unreliable.  Nor did it disclose that
SCANA had hired a third party to perform an independent assessment of the construction project
as a result of the significant delays.
153. SCANA’s Form 10-Q further stated, falsely, that “Based on the above substantial
completion dates provided by [Westinghouse] of June 2019 and June 2020 for Units 2 and 3,
respectively, both New Units are expected to be operational and to qualify for the nuclear
production tax credits; however, further delays in the schedule or changes in tax law could
impact such conclusions.”  At this time, SCANA and its senior management, including Marsh
and Byrne, knew that the new nuclear units would not be completed in time to qualify for the
production tax credits based on the current rate of progress.  SCANA and its senior management,
including Marsh and Byrne, also knew that there would be substantial additional delays and that
the revised schedule was not reliable.
154. SCANA’s Form 10-Q omitted the true status of the nuclear expansion project,
including the unreliability of the schedule and the fact that SCANA would not qualify for the
federal tax credits at the current rate of progress.
155. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the
Sarbanes-Oxley Act, Marsh certified that he had reviewed the periodic filing and that it contained
no untrue statements.  Marsh knew that his certification was false and misleading.
156. Byrne also knew that the information in SCANA’s periodic filing was false and

34

misleading.  Nevertheless, on August 7, 2015, Byrne signed a sub-certification letter in connection
with the filing that falsely stated he had “no knowledge of any fraud or suspected fraud affecting
SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form 10-Q.
157. By October 2015, Bechtel was ready to discuss key observations from its study
with SCANA and Santee Cooper.  At that time, construction on Unit 2 and Unit 3 was still
significantly behind schedule and had been falling further behind schedule each month.
158. As one SCANA nuclear construction manager put it:  “Basically, not a single
schedule mitigation has worked.”  Another SCANA nuclear finance manager noted that at the
current rate of progress “it would take 22 years to complete the plants.”  [Emphasis added].
159. On October 22, 2015, Bechtel met with senior executives from SCANA to present
orally its findings.  Marsh and Byrne attended the presentation, which included a PowerPoint
presentation by Bechtel entitled, “Preliminary Results of Bechtel Assessment.”
160. Bechtel’s presentation included several highly critical findings regarding the
project schedule and SCANA’s management of the project.
161. Bechtel found that SCANA and its executives were not prudently managing the
project.  Specifically, Bechtel wrote:  “The oversight approach taken by [SCANA and Santee
Cooper] does not allow for real-time, appropriate cost and schedule mitigation.”  Bechtel further
noted that SCANA and Santee Cooper “do not have an appropriate project controls team to
assess/validate [Westinghouse’s] reported progress and performance.”
162. Bechtel made several recommendations on how SCANA could improve its
oversight of the project.
163. In terms of schedule, Bechtel found that “the current schedule is at risk” and that
“[t]o-go scope quantities, installation rates, productivity, and staffing levels all point to

35

completion later than current forecast.”
164. Bechtel’s preliminary results indicated that Unit 2, which was currently scheduled
to be completed by June 2019, would not be completed until between December 2020 and
August 2021 (i.e., 18 to 26 months later than scheduled).
165. Bechtel found that Unit 3, which was scheduled to be completed by June 2020,
would not be completed until between June 2022 and June 2023 (i.e., 24 to 36 months later than
scheduled).
166. These revised dates left only a small, one month window for Unit 2 to qualify for
the production tax credits.  Unit 3 would not be completed in time to qualify for the tax credits.
167. Significantly, the revised completion dates in Bechtel’s presentation reflected a
best case scenario for SCANA that assumed implementation of Bechtel’s recommendations and
significant improvement in the rate of construction.
168. Bechtel further observed that Westinghouse’s “forecasts for schedule durations,
productivity, forecasted manpower peaks, and percent complete do not have a firm basis.”
169. In conclusion, Bechtel found that “the V.C. Summer Units 2 and 3 project suffers
from various fundamental [engineering, procurement, and construction] and major project
management issues that must be resolved for project success.”
170. Marsh’s notes from the meeting include the delayed completion dates for Unit 2
and Unit 3 that would make the units ineligible for the tax credits under the Energy Policy Act.
His notes also reflect that the actual monthly progress achieved on the project was a fraction of
the progress needed to complete the new units in time to qualify for the tax credits.
171. On October 27, 2015, just five days after Bechtel presented its findings to SCANA,
SCANA filed a Form 8-K with the Commission and issued a press release announcing an

36

amendment to the existing EPC Agreement (“EPC Amendment”).  Neither the Form 8-K nor the
press release disclosed the true status of the project.
172. Instead, despite Bechtel’s finding that the completion of Unit 2 and Unit 3 would be
delayed by 18 months to 3 years, SCANA announced that the EPC Amendment revised the
contractual Guaranteed Substantial Completion Dates (“GSCD”) for the new nuclear units by just
two months – to August 31, 2019 for Unit 2 and August 31, 2020 for Unit 3.
173. SCANA and its senior executives, including Marsh and Byrne, did not want
Bechtel’s findings to be made publicly available, and the company went to great lengths to hide
those findings and the true status of the project from the ORS, PSC, and investors.
174. SCANA, in publicizing the EPC Amendment, which was also attached to
SCANA’s Form 10-Q for the third quarter of 2015, did not disclose that the schedule contained in
the amended agreement was unreliable and unachievable.  SCANA also failed to disclose this
information in its BLRA Quarterly Report for the period ending September 30, 2015.
175. In addition to revising the schedule, SCANA stated that the EPC Amendment
resolved the outstanding disputes between SCANA and Westinghouse, and included a provision
for liquidated damages in the event that Westinghouse failed to complete the project in time for
SCANA to qualify for the production tax credits.  The total liquidated damages for SCANA and
Santee Cooper were capped at $463 million per new unit, however, with SCANA’s portion being
approximately $255 million per new unit.
176. Several assumptions regarding construction progress and performance metrics were
known by SCANA to be necessary to achieve the new completion dates of August 2019 and
August 2020, including a performance factor of 1.15 and a percent complete of 3% per month.
SCANA’s senior management, including Marsh and Byrne, knew the importance of these metrics

37

and that Westinghouse was nowhere close to achieving either of them.
177. Additionally, the EPC Amendment included an option (known as the “fixed price
option”) whereby SCANA and Santee Cooper could elect to proceed with the project at a set
price going forward.  If SCANA elected the fixed price option, however, the liquated damages
would be reduced to $186 million per unit (or $372 million for both units).
178. Bechtel told Marsh that it was close to issuing a written report outlining their
findings and recommendations.  Marsh asked Bechtel to hold off on finalizing the report and,
ultimately, asked that Bechtel send the report to SCANA’s outside counsel.
179. On November 6, 2015, SCANA filed a Form 10-Q with the SEC.
180. SCANA’s Form 10-Q stated that the nuclear production tax credits “could total as
much as approximately $1.4 billion.”  SCANA failed to disclose, however, that its new nuclear
team, including Byrne and Marsh, knew that Westinghouse would not complete Unit 2 or Unit 3 in
accordance with the revised schedule and that the company would not qualify for the tax credits at
the current rate of progress.
181. SCANA’s Form 10-Q further stated, falsely, that “[b]ased on the guaranteed
substantial completion dates provided above [August 2019 and August 2020], both New Units
are expected to be operational and to qualify for the nuclear production tax credits; however,
further delays in the schedule or changes in tax law could impact such conclusions.”  At this
time, SCANA and its senior management, including Marsh and Byrne, knew that based on the
current rate of progress the new nuclear units would not be completed in time to qualify for the
production tax credits.  SCANA and its senior management, including Marsh and Byrne, also
knew that there would be substantial additional delays and that the revised schedule was not
reliable.

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182. SCANA’s Form 10-Q omitted the true status of the nuclear expansion project,
including the unreliability of the schedule and that the new units were unlikely to qualify for the
production tax credits.
183. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the
Sarbanes-Oxley Act, Marsh certified that he had reviewed the periodic filing and that it contained
no untrue statements.  Marsh knew, however, that his certification was false and misleading.
184. Similarly, Byrne knew that the information in SCANA’s periodic filing was false
and misleading.  Nevertheless, on November 6, 2015, Byrne signed a sub-certification letter in
connection with the filing that stated he had “no knowledge of any fraud or suspected fraud
affecting SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form
10-Q.
185. A week later, on or about November 12, 2015, Bechtel detailed its findings in a
draft Project Assessment Report (the “Draft Bechtel Report”).
186. The Draft Bechtel Report was highly critical of SCANA’s management of the
project, concluded that the stated completion dates of June 2019 (Unit 2) and June 2020 (Unit 3)
were not going to be achieved, and found that Westinghouse’s “plans and schedules are not
reflective of actual project circumstances.”
187. The Draft Bechtel Report stated, in short, that “the to-go scope quantities,
installation rates, productivity, and staffing levels all point to project completion later than the
current forecast.”
188. The Draft Bechtel Report concluded that, even if their recommendations were
adopted, Unit 2 would not be completed until between December 2020 and August 2021 and
Unit 3 would not be completed until between June 2022 and June 2023.  In other words, neither

39

Unit 2 nor Unit 3 would be completed until at least 18 months to 3 years later than SCANA and
its executives, including Marsh and Byrne, were telling the PSC and investors.  In addition,
Bechtel’s assessment meant that SCANA would not qualify for some, and may not qualify for
any, of the $1.4 billion in federal production tax credits.
189. On November 12, 2015, outside counsel for SCANA instructed Bechtel that it
was “extremely important” that Bechtel “hold the final report” until he had reviewed it.
190. After reviewing the Draft Bechtel Report, SCANA’s outside counsel requested
that Bechtel remove the schedule projections showing that Unit 2 and Unit 3 would not be
completed until much later than SCANA and its senior management, including Marsh and
Byrne, had publicly stated.
191. SCANA’s outside counsel also requested that Bechtel remove much of the
unfavorable language regarding SCANA’s management of the project.
192. Just one week later, on November 19, 2015, SCANA’s senior management,
including Marsh and Byrne, testified before the PSC in an ex parte hearing to discuss the project
and the EPC Amendment.  Their testimony was made publicly available shortly after the
testimony was given.
193. At the hearing, Marsh testified falsely about SCANA’s ability to complete the
project in time to qualify for the production tax credits.
194. Specifically, Marsh testified:  “As you know, those tax credits expire at the end of
2020.  We have to have our plants on-line at the end of 2020 to qualify for those.  The first plant
is certainly more than a year ahead of that; the second plant is a little bit less than six months
ahead of that . . . .”
195. Marsh went on to say:  “[T]he guaranteed substantial completion dates, those

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have moved from June of ‘ 19 and June of 2020 for Units 2 and 3 – under the ‘EPC’ and the
‘Fixed Price Option’ those have both moved to August of ‘19 and August of 2020.  A couple of
months’ move there, but still we believe in time to finish the units for the production tax credit
qualification.”
196. Byrne also testified falsely at the ex parte hearing before the PSC.  Byrne testified
that under the ECP Amendment the guaranteed substantial completion dates were now August
31, 2019 for Unit 2 and August 31, 2020 for Unit 3, even though he knew that those dates were
not achievable.
197. Byrne also failed to disclose that both units would not be completed until much
later and that the schedule was not reliable.  Just one month earlier, Byrne himself had authored a
document entitled, “No Faith in Schedule Promises.”  In the document, Byrne listed all of the
completion dates promised by Westinghouse over the life of the project, including the current
August 2019 and August 2020 dates.  In the document, Byrne also referred to an “independent
assessment” by Westinghouse that had the completion dates delayed by 13 months beyond the
August 2019 and August 2020 dates.  Byrne failed to disclose that he had “no faith” in the
representations being made by Westinghouse regarding the construction schedule when he
testified before the PSC in November 2015.
198. Bechtel ultimately acquiesced to the demands of SCANA’s counsel and agreed to
separate its conclusions regarding the schedule and completion dates into a stand-alone report.
Bechtel agreed to submit a new report to counsel for SCANA that did not address the
unreliability of the schedule.
199. On or around February 5, 2016, Bechtel delivered the final report to SCANA’s
counsel (“Bechtel’s Final Report”).

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200. Bechtel’s Final Report was, in essence, a scrubbed version of the Draft Bechtel
Report.  Bechtel’s Final Report omitted Bechtel’s schedule assessment analysis, the predicted
actual completion dates for Unit 2 and Unit 3 that extended beyond the production tax credit
deadline, and language that the current schedule was unreliable.
201. Bechtel’s Final Report also omitted much of the language regarding SCANA’s
mismanagement of the project.
202. SCANA’s counsel delivered Bechtel’s Final Report to officers of Santee Cooper
and SCANA, including Marsh and Byrne.
203. SCANA and its senior management, including Marsh and Byrne, contradicted
Bechtel’s adverse findings regarding the schedule and management of the project in their public
statements to the ORS, the PSC, and investors.  As Marsh wrote in anticipation of a meeting with
Santee Cooper to discuss Bechtel’s findings:  “Need to protect document.”
204. Even when faced with direct questions regarding the retention of consultants,
SCANA chose to mislead its regulators.  In March 2016, ORS sent SCANA a formal Request for
Information asking whether it had retained a project consultant for the V.C. Summer expansion
project.  SCANA responded by identifying two consultants who had been paid $5,000 and
$25,000, respectively, for services regarding the process of selecting construction payment
milestones.  SCANA and its senior management failed to disclose Bechtel as a project
consultant, even though Bechtel had been paid $1 million and had rendered a detailed assessment
of the construction schedule and SCANA’s oversight of the project.
Defendants Continue to Make False and Misleading Statements as
the Nuclear Expansion Project Falls Further Behind Schedule in 2016
205. In 2016, Westinghouse continued to fall further behind schedule in constructing
Unit 2 and Unit 3.  SCANA and its senior management knew about these construction delays and

42

the likelihood that SCANA would not qualify for the $1.4 billion in production tax credits.
206. Others at SCANA knew as well.  On January 4, 2016, a member of SCANA’s
nuclear team informed Marsh that she “did not want to be involved in any of the SEC reporting
activities because she was scared of [SCANA’s] disclosures,” according to Marsh’s notes from
the meeting.
207. Despite the unreliability of the construction schedule and the likelihood of the
company failing to qualify for the production tax credits, SCANA continued to publicize
progress being made on the project, including in press releases and videos posted to the internet.
These public statements and videos created the false impression that the construction schedule
was reliable and that the company would qualify for the production tax credits.
208. For example, on January 19, 2016, SCANA released a video entitled,
“Highlighting a Year of Progress for V.C. Summer Units 2 and 3.”  In the video, SCANA touted
progress being made in different areas of the project.  SCANA also issued a press release the
same day that listed the achievement of several “major milestone[s].”
209. On January 25, 2016, SCANA’s Risk Management Committee held a quarterly
meeting, with Marsh and Byrne in attendance.  At the meeting, SCANA executives identified
“schedule delays” and the receipt of “production tax credits” as “key risk[s]” and rated them
“Red.”
210. SCANA defined “Red” risk areas as:  “Higher area of management concern.
Events related to this area have progressed or are progressing in a manner that could be
ultimately adverse to the accomplishment of SCANA’s strategic plan.  Requires very heightened
management attention and activity in this area.”
211. On February 18, 2016, Byrne participated in SCANA’s fourth quarter earnings

43

call and utilized a PowerPoint presentation.  On the call, Byrne referred to a slide that indicated
the guaranteed substantial completion dates as being August 2019 for Unit 2 and August 2020
for Unit 3.  Byrne did not disclose that this schedule was unreliable and that, based on the most
recent information presented to him, it appeared likely that neither nuclear unit would be
completed by those dates.
212. SCANA posted the transcript from the earnings call and the PowerPoint
presentation on its website.  Investors were also allowed to listen to the earnings call.
213. In addition, despite knowing that the expansion project was severely behind
schedule, SCANA filed a Form 10-K with the SEC on February 26, 2016, that repeated the same
false and misleading statements regarding the project that had appeared in earlier filings.
214. SCANA’s Form 10-K stated that the nuclear production tax credits “could total as
much as approximately $1.4 billion.”  SCANA failed to disclose that its nuclear team, including
Byrne and Marsh, had concluded that Westinghouse would not complete Unit 2 or Unit 3 in
accordance with the revised schedule and, thus, that the schedule was unreliable.
215. SCANA’s Form 10-K further stated, falsely, that “[b]ased on the guaranteed
substantial completion dates provided above [ August 2019 and August 2020], both New Units
are expected to be operational and to qualify for the nuclear production tax credits; however,
further delays in the schedule or changes in tax law could impact such conclusions.”  At the time,
SCANA and its senior management, including Marsh and Byrne, knew that, based on the current
rate of progress, the new nuclear units would not be completed in time to qualify for the
production tax credits.  SCANA and its senior management, including Marsh and Byrne, also
knew that there would be substantial additional delays and, thus, the revised schedule was not
reliable.

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216. SCANA’s Form 10-K omitted the true status of the nuclear expansion project,
including the unreliability of the schedule and the serious doubts about the new units qualifying for
the production tax credits.  Instead, SCANA’s Form 10-K misleadingly referenced guaranteed
substantial completion dates of August 2019 for Unit 2 and August 2020 for Unit 3.
217. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the
Sarbanes-Oxley Act, Marsh certified that he had reviewed the annual filing and that it contained no
untrue statements.  Marsh knew, however, that his certification was false and misleading.
218. Byrne also knew that the information in SCANA’s annual filing was false and
misleading.  Nevertheless, on February 26, 2016, Byrne signed a sub-certification letter in
connection with the filing that falsely stated he had “no knowledge of any fraud or suspected fraud
affecting SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form
10-K.
219. On March 2 and 3, 2016, SCANA executives, including Byrne, made a PowerPoint
presentation at investor conferences sponsored by Morgan Stanley and UBS Securities, LLC.
220. In the presentations, SCANA claimed that it delivered “strong investor value”
because the company enjoyed “investment grade credit ratings,” a “constructive regulatory
environment,” and because the company had “transparent” operations.
221. SCANA also stated that Unit 2 and Unit 3 were scheduled to be completed by
August 2019 and August 2020, even though the company and its senior executives knew that those
scheduled completion dates were not achievable.
222. On March 9, 2016, Byrne participated in a similar presentation at an investor
conference sponsored by Barclays.
223. Marsh knew that these investor conferences were taking place and the content of

45

the PowerPoint presentations that SCANA executives, including Byrne, were making at them.
224. On March 17, 2016, Byrne attended a meeting with Westinghouse and its new
sub-contractor where, among other topics, they discussed the continuing delays in meeting
construction milestones.  As another SCANA executive said at the meeting, “we need results.”
225. On March 21, 2016, SCANA’s senior management, including Marsh and Byrne,
participated in a meeting that included the Board of Directors from SCANA and Santee Cooper.
At the meeting, a member of SCANA’s Board noted that “for whatever reason progress isn’t
happening and that needs to change.”  Marsh did not disagree with this statement and, according
to notes from the meeting, he acknowledged that “the ultimate problem is performance.”
226. On March 28, 2016, SCANA held another Risk Management Committee meeting,
which was attended by Marsh and Byrne.  At the meeting, executives again identified “schedule
delays” and the receipt of “production tax credits” as “key risk[s]” facing the company.
227. On March 29, 2016, SCANA filed a Form 14A Proxy Statement with the SEC.
228. As part of that filing, Marsh signed a letter to the company’s shareholders.  In the
letter, Marsh wrote:  “During a very challenging 2015, we continued to move forward and make
substantial progress on initiatives important to our company such as our new nuclear
construction project[.]”
229. SCANA’s Proxy Statement incorporated by reference the company’s previous
filings with the SEC.  In addition, the Proxy Statement repeated the same misstatements that the
company had made in its periodic filings regarding the construction schedule for the new nuclear
units and the receipt of federal tax credits.  Specifically, SCANA stated that the tax credits
“could total as much as approximately $1.4 billion” and that “[b]ased on the guaranteed
substantial completion dates provided above [August 2019 and August 2020], both New Units

46

are expected to be operational and to qualify for the nuclear production tax credits; however,
further delays in the schedule or changes in tax law could impact such conclusions.”
230. On April 15, 2016, SCANA’s nuclear team sent the company’s senior
management, including Marsh and Byrne, a document entitled “SGE&G List.”  In the document,
SCANA’s nuclear team agreed with many of Bechtel’s observations and recommendations
regarding the lack of progress on the expansion project.
231. In addition, SCANA’s nuclear team made the following comments regarding the
problems plaguing the project:
• “Work activities should be planned based on a realistic evaluation of the
work, rather than optimistic projections due to schedule pressure from
management”;
• “Work was performed out of sequence to support fictitious milestone
completion of Setting CA20 Module, knowing that a significant effort was
required to complete the module”;
• “Contractor needs to resource load the schedule based on reasonable unit rates
and set performance goals and schedule based on realistic information.
Overly aggressive and optimistic schedule dates are not the best way to
encourage craft labor performance.  This has been demonstrated by the
repeated failure of the contractor to meet published schedule dates for project
milestones”; and
• “The Contractor has continually modified metrics and graphs to obscure the
poor performance.  Baselines have been repeatedly set and then re-set at a
later date, thus making performance measurement impossible.  We should be

47

looking at total project data instead of short-term 9–12 months[.] ”
232. Finally, in the “SCE&G List” document, SCANA’s nuclear team noted to Marsh
and Byrne:  “It would be a good idea to encourage and recognize meaningful progress and
successes.  This is difficult to accomplish when the project is not seeing meaningful successes.”
233. On April 28, 2016, despite receiving the “SCE&G List” document less than two
weeks earlier, Byrne misleadingly touted significant progress being made on the project during
SCANA’s first quarter earnings call.  Byrne also presented several photographs of the
construction site to show that progress was being made on the project.   In reality, Byrne knew
that the project was severely behind the revised schedule and was continuing to fall further
behind that schedule every month.
234. SCANA posted the transcript from the earnings call on its website.  In addition,
investors were allowed to listen to the earnings call.
235. On May 6, 2016, SCANA filed a Form 10-Q with the SEC that repeated the same
false and misleading statements as the company’s prior filings.  SCANA’s Form 10-Q also omitted
the true status of the nuclear expansion project, including the unreliability of the schedule and the
serious doubts about the new units qualifying for the production tax credits.
236. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the
Sarbanes-Oxley Act, Marsh certified that he had reviewed the periodic filing and that it contained
no untrue statements.  Marsh knew, however, that his certification was false and misleading.
237. Similarly, Byrne knew that the information in SCANA’s periodic filing was false
and misleading.  Nevertheless, on May 6, 2016, Byrne signed a sub-certification letter in
connection with the filing that falsely stated he had “no knowledge of any fraud or suspected fraud
affecting SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form

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10-Q.
238. On May 19, 2016, Byrne attended a meeting with Westinghouse regarding the
project.  According to the minutes from the meeting, a member of SCANA’s nuclear team noted
that Westinghouse was not achieving the schedule milestones that it needed to meet for the
project to be completed by August 2019 (Unit 2) and August 2020 (Unit 3), and that
Westinghouse’s mitigation efforts to date had not been successful in remedying these problems.
They also discussed difficulties in other areas of the project as well that were affecting the
schedule, such as procurement.
239. The EPC Amendment assumed that Westinghouse could complete Unit 2 by
August 2019 and Unit 3 by August 2020 by achieving a percent complete per month rate of 3%.
At the May 19 meeting attended by Byrne, however, Westinghouse acknowledged that during the
first four months of 2016 it had averaged a monthly percent complete rate of only 0.5%.
SCANA’s nuclear team knew that, at that rate of progress, it would take an additional seven
years to finish the project.
240. Nevertheless, SCANA published several press releases in 2016 that touted various
milestones being met.  By regularly communicating to the public that the project was
progressing, SCANA misled investors and others as to the true status of the project and failed to
disclose material information revealing that the schedule was unreliable, significant additional
delays were likely to occur, and the critical tax credits were at risk.  For example, on April 18,
2016, SCANA issued a press release titled, “SCE&G Achieves Construction Milestone With
Placement of Unit 3 Vessel Ring.”  In the press release, SCANA wrote that “[p]rogress continues
with approximately 3,700 Westinghouse personnel and subcontractor workers on site daily.”

49

SCANA’s May 26, 2016 Petition to the PSC
241. On May 26, 2016, SCANA submitted another petition to the PSC to update the
construction and capital cost schedules on the nuclear expansion project.  Marsh and Byrne were
aware of the petition, which was made publicly available shortly after it was filed.
242. In its petition, SCANA requested PSC approval to exercise the fixed price option
under the EPC Amendment.  As SCANA explained, “under that option, the price of the work
necessary to complete the Units is fixed at $3.345 billion.”   SCANA had notified Westinghouse
a few days earlier that it intended to exercise the fixed price option.
243. SCANA also requested that the PSC approve the August 2019 (Unit 2) and
August 2020 (Unit 3) completion dates in the EPC Amendment.  SCANA reiterated that it could
receive federal production tax credits of $2.2 billion “when grossed up for taxes” if Unit 2 and
Unit 3 are completed by January 1, 2021.
244. At the same time, SCANA requested that the PSC find its cost and schedule
changes to be the result of reasonable and prudent oversight of the project by the company.
245. In its May 26, 2016 petition to the PSC, SCANA contradicted the findings of its
own nuclear team and Bechtel, including the fact that the construction schedule was unreliable
and that the company was unlikely to qualify for the production tax credits.
246. Additionally, SCANA pressured its partner on the project, Santee Cooper, not to
disclose the existence or content of Bechtel’s assessment.
247. On May 26, 2016, SCANA filed a Form 8-K with the SEC and issued a press
release announcing the filing of the update petition with the PSC.  SCANA misleadingly stated
in them:  “The construction schedule reflected in the Petition indicates a guaranteed substantial
completion date for Unit 2 of August 2019 and a guaranteed substantial completion date for Unit

50

3 of August 2020.”  SCANA and its senior executives, including Marsh and Byrne, knew that the
schedule was unreliable and that neither new unit would be completed by those dates.
248. In addition, in the May 26, 2016 press release, Marsh misleadingly stated:
“Construction of the two new nuclear units continues to progress.”  In fact, Marsh knew that the
project was getting further behind schedule every month.
Defendants Mislead Financial Analysts About the Project
249. On June 2, 2016, Marsh and Byrne were forwarded an e-mail written by Santee
Cooper’s Senior Vice President for Nuclear Energy regarding the continued lack of progress on
the project.  The Santee Cooper executive wrote:  “Unfortunately, five months after
[Westinghouse] has had complete control of the Project, there is little evidence that [it] is taking
the steps necessary to resolve these challenges and relieve pressure on the substantial completion
dates.  Each meeting I attend we continue to report out and discuss the same basic issues as
progress on the critical path continues to slip.”
250. Later that same day, SCANA executives, including Byrne, met with analysts from
Wells Fargo Securities, LLC to discuss the expansion project at V.C. Summer.  Marsh had met
with the analysts the night before.
251. At the June 2, 2016 meeting, Byrne presented a PowerPoint presentation that
misleadingly stated that the “new in service dates” for Unit 2 was “August 2019” and for Unit 3
was “August 2020.”  Byrne knew that Unit 2 and Unit 3 were nowhere close to being “in
service” by those August dates – i.e., they would not be producing power in time to qualify for
the federal production tax credits.  Byrne nevertheless presented, as he had many times before,
photographs of the construction site that purported to show meaningful progress being made on
the project all the while knowing that the project was significantly behind schedule.

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252. The next day, Byrne again touted the August 2019 and August 2020 “in service
dates” in a video presentation to Fitch Ratings, Inc., the entity that was rating SCANA’s debt.
253. Neither Byrne nor any other SCANA representative told Fitch about Bechtel’s
findings that Unit 2 and Unit 3 would not be completed on schedule.  In addition, SCANA and
its executives, including Byrne, did not disclose the continuing deterioration of the project
schedule, including the monthly data that showed construction was not progressing at the rate
necessary to complete Unit 2 by August 2019 and Unit 3 by August 2020.
SCANA Issues Another $500 Million in First Mortgage Bonds
254. On August 27, 2015, SCANA filed with the SEC another Automatic Shelf
Registration statement on Form S-3ASR to register the sale of first mortgage bonds.  The Form S-
3ASR registration statement incorporated by reference certain prior filings and all subsequently
filed periodic reports filed by SCANA, including the periodic reports discussed in this Complaint.
Marsh signed the Form S-3ASR.
255. On June 8, 2016, SCANA issued $500 million in First Mortgage Bonds.  SCANA
issued $425 million in bonds with an interest rate of 4.10% and a maturity date of June 15, 2046,
and $75 million in bonds with an interest rate of 4.50% and a maturity date of June 1, 2064.
256. Byrne’s misleading presentation to Fitch the week before had the desired effect.
Fitch reaffirmed SCANA’s “Stable” rating on June 9, 2016, which was the day after SCANA
issued the First Mortgage Bonds.  Fitch also gave SCANA’s new bond offering an “A-” rating.
257. SCANA was able to sell all $500 million in First Mortgage Bonds at , as one
executive described it, “amazing interest rates.”  SCANA used proceeds from the bond sales on
the nuclear expansion project at V.C. Summer.
258. Marsh and Byrne knew about the $500 million bond offering and the

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representations in its related registration statement filed with the SEC.  Indeed, Marsh
congratulated the finance team for selling the bonds.
259. At this time, SCANA had a market capitalization of around $10 billion.
Defendants Mislead the PSC (Again)
260. In June 2016, SCANA and Santee Cooper were still trying to evaluate
recommendations made by Bechtel and how those recommendations should be implemented.
On June 17, 2016, Marsh received a “Project Assessment Report” and an “Executive Summary”
from SCANA’s nuclear team that addressed some of the issues raised by Bechtel.
261. SCANA’s nuclear team recognized that Bechtel had raised “valid concerns” with
the construction schedule.  The team also listed the development of “a project schedule plan to
achieve construction completion of at least 3% per month” as a “key issue.”
262. A little over a week later, on June 27, 2016, Marsh and Byrne attended a Risk
Management Committee meeting.  At the meeting, SCANA executives again identified
“schedule delays” and the receipt of “production tax credits” as “key risk[s]” facing the company
and rated them “Red,”  meaning that there was significant risk that the company would not
qualify for the tax credits.
263. The very next day, on June 28, 2016, SCANA filed a revised rate petition with the
PSC in which it sought to receive increased rates from its customers.  Marsh and Byrne were
aware of the petition, and the petition was made publicly available shortly after it was filed.
264. On June 29, 2016, Byrne received a copy of a PowerPoint presentation that
Westinghouse and its sub-contractor planned to present the next day to senior executives at
SCANA and Santee Cooper.
265. The presentation provided a grim status of the expansion project in “5 Project Focus

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Areas.”   These five focus areas included:  (i) Procurement; (ii) Modules – Structural and
Mechanical; (iii) Prevention of and Timely Resolution of Design Issues; (iv) Construction
Resources; and (v) Construction Efficiency/Schedule Adherence.  The presentation made clear that
the extensive problems in all of the focus areas affected the reliability of the construction schedule
and raised doubts about Westinghouse’s ability to complete Unit 2 and Unit 3 in time for SCANA
to qualify for the $1.4 billion in production tax credits.
266. Although Westinghouse was going to present the information, SCANA’s own
nuclear team drafted slides regarding the five project focus areas for the presentation.
267. For Procurement, SCANA’s nuclear team wrote:  “The project does not have
equipment and commodities that meet requirements readily available to support construction work
fronts.  This impacts the ability of the project to reliably achieve schedule.”
268. For Modules – Structural and Mechanical, SCANA’s nuclear team wrote:
“Modules are not being fabricated and delivered in accordance with the project execution plan.
Modules are delivered later than the construction need date.  A significant number of modules are
delivered incomplete or with quality issues.  This requires outfitting, rework or repair at the project
site that is not part of the baseline schedule.”
269. For Prevention of and Timely Resolution of Design Issues, SCANA’s nuclear team
wrote:  “The project does not adequately address constructability issues requiring design changes
or interpretations.  All engineering design is not finalized in time to procure adequate material and
plan work in advance of construction.  This adversely impacts the ability to reliably achieve
schedule.”  [Emphasis added].
270. For Construction Resources, SCANA’s nuclear team wrote:  “The project does not
have sufficient resources to support active construction work fronts.  This impacts the ability of the

54

project to reliably achieve schedule or mitigate issues from engineering, procurement, or
constructability delays.”
271. Finally, for Construction Efficiency/Schedule Adherence, SCANA’s nuclear team
wrote:  “The project performance factor (PF) is consistently above the goal (PF>2 each
month in 2016) and trending in a negative direction.  The majority of project milestones are
not met on their scheduled dates.  The percentage of schedule activities completed on time is
well below the goal and does not allow for a reliable Integrated Project Schedule.”  [Emphasis
added].
272. On June 30, 2016, Westinghouse and its sub-contractor made the presentation at a
meeting that included Santee Cooper’s and SCANA’s senior management, including Marsh and
Byrne.
273. The very next day, July 1, 2016, Marsh and Byrne submitted written testimony to
the PSC in support of SCANA’s petition that the PSC adopt August 2019 and August 2020 as the
Guaranteed Substantial Completion Dates for Unit 2 and Unit 3 and approve the fixed price option.
Their testimony was made available to the investing public.
274. Marsh began by stating:  “All company witnesses testify in support of the
reasonableness and prudency of the updated construction schedule and the related schedule of
capital costs it represents.  From my knowledge of the project and my perspective as SCE&G’s
Chief Executive Officer, I can affirmatively testify, as I have testified in prior proceedings, that
SCE&G is performing its role as project owner in a reasonable, prudent, and cost-effective
manner.”  In fact, contrary to this statement, Marsh knew that Bechtel had raised serious doubts
about the manner in which SCANA was overseeing the nuclear expansion project.
275. Marsh also misleadingly stated:  “The federal tax credits that are available to the

55

project are worth a total of $2.2 billion to customers.  Both of our plants must produce power
before the end of 2020 to qualify for the full amount of these credits.  The [guaranteed substantial
completion date] for Unit 2 is now 16 months ahead of that deadline and th[e] [guaranteed
substantial completion date] for Unit 3 is four months ahead of it.”  Marsh knew that the
construction schedule was unreliable and unachievable, and that neither nuclear unit was likely to
be completed in time to qualify for the production tax credits.
276. Marsh concluded:  “In light of these facts, we believe that the logical and prudent
choice is to proceed with the construction plan and apply the BLRA as written.”
277. In his written testimony, Byrne falsely stated that the August 2019 and August 2020
substantial completion dates and the construction schedule that supported them were reasonable.
278. Specifically, Byrne testified, falsely, that:  “The substantial completion dates and
the construction schedules . . . are based on extensive construction data that Westinghouse has
provided to [SCANA] . . . .  [SCANA’s] construction experts have reviewed this schedule and
found that its scope and sequencing is logical and appropriate. . . .  Consistent with its
responsibilities as Owner, [SCANA] has carefully reviewed and evaluated all information that is
available related to the project and schedule and finds it to be reasonable.  In my opinion,
Westinghouse . . . [has] a reasonable construction plan in place to achieve the Guaranteed
Substantial Completion Dates” (i.e., August 2019 and August 2020).  [Emphasis added].
279. Byrne concluded by falsely stating:  “It is my considered opinion that [the revised
schedule] represents a reasonable and prudent schedule for completing the project . . . and should
be adopted as an update to the construction schedule that was initially adopted[.]”  As additional
support for the petition, Byrne attached photographs of the project to his pre-filed testimony to
show progress being made on completing the new nuclear units.

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280. In terms of the production tax credits, Byrne testified that SCANA “and its
customers stood to lose approximately $2.2 billion in projected benefits if neither Unit were to
meet the deadline.”  Byrne then falsely claimed that SCANA was “able to address this problem”
through the EPC Amendment.
281. At the same time, another SCANA executive falsely testified before the PSC that:
“In each update case since 2009, the Company has come before the [PSC] with the best
information available concerning the anticipated construction schedule for completing the Units
and the anticipated costs associated with that schedule.”  That executive went on to say:  “The
current schedules reflect the best information available about the anticipated costs and construction
timetables for completing the project.”
Defendants Mislead the ORS Regarding the Project
282. On or about June 30, 2016, the ORS’s Executive Director sent a letter to Marsh
detailing the ORS’s concerns regarding the validity of the schedules for Unit 2 and Unit 3.  The
letter, which the ORS drafted to be sent to the Public Utilities Review Committee (“PURC”) and
the governor of South Carolina, explained:  “The ORS is currently in a heightened state of
concern regarding the construction cost overruns and schedule delays for V.C. Summer (VCS)
Nuclear Units 2 & 3. . . .  In the case of Unit 2, ORS believes that, while the date in the filing of
August 31, 2019 is unlikely to be met, it is possible that Unit 2 may still be able to qualify for the
Federal Production Tax Credits that expire on December 31, 2020.  However, completing Unit 2
in time to receive the Federal Production Tax Credits will require improvements to the current
construction methodology.”
283. The ORS’s letter continued:  “ORS has no confidence that Unit 3 can meet the
Current Federal Production Tax Credit Deadline of December 31, 2020. . . .  This makes the

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validity of the current schedule highly suspect.”
284. The ORS’s Executive Director requested that SCANA “respond to the issues
raised in the letter before they complete the final version.”  Marsh forwarded ORS’s letter to
Byrne and other SCANA executives on July 1, 2016.  Marsh tasked Byrne and another SCANA
executive with drafting a response on behalf of SCANA that could be incorporated into ORS’s
letter.
285. The ORS also informed SCANA that it wanted to depose a Westinghouse
representative regarding the project and, in particular, the EPC Amendment and the project
schedule.
286. On June 29, 2016, Marsh and another SCANA executive met with the ORS’s
Executive Director to discuss the deposition of a Westinghouse representative.
287. Marsh drafted his own “notes for discussion” to use in an upcoming conversation
with the ORS’s Executive Director that made clear his desire for the ORS not to express its
doubts about the project publicly or to depose a representative from Westinghouse.  Marsh’s
notes also describe the impact such public statements by the ORS would have on SCANA’s
ability to sell securities at favorable rates.
288. Specifically, Marsh wrote:  “  If you [ORS] go forward, it will be hard to put this
genie back in the bottle.  Potential for devastating results.”
289. Marsh continued:  “The financial markets see the ORS, and you specifically, as
the face of regulation in SC.
• Credit rating agencies
• Bond underwriters
• Investment analysts
• Shareholders

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• Banks
Your planned actions will send shock waves to this group.  You will be overrun with
calls and inquiries.  They will jump to conclusions and publish their thoughts and
concerns.”
290. Marsh then noted:  “Our public disclosures to the SEC and investors will have to
address this and address as a risk.  The ‘supportive regulatory environment’ in SC is the
foundation of our bond ratings and the support we receive from the financial community.
Without that support, we will have difficulty selling our securities at favorable prices, which
will raise prices for our customers.”  [Emphasis added].
291. In an attempt to reassure ORS and assuage its concerns regarding the schedule,
Marsh’s notes also directed ORS to recently filed PSC testimony by Byrne stating that the
schedule was reasonable and achievable – testimony that Marsh knew was false.
292. SCANA’s senior management, including Marsh and Byrne, engaged in a
concerted effort to persuade ORS not to state publicly that it thought SCANA might not qualify
for the production tax credits.
293. Among other changes, SCANA tried to eliminate the statements in ORS’s letter
about the reliability of the schedule and the likelihood of the company receiving production tax
credits.  ORS had originally written:  “ORS has no confidence that Unit 3 can meet the current
Federal Production Tax Credit Deadline of December 31, 2020. . . .  This makes the validity of
the current schedule highly suspect.”  SCANA sought to change the language to:  “In sum, ORS
believes that completing Unit 2 by the August 31, 2019 date in [SCANA’s] most recent filing
and completing Unit 3 in time to receive the Federal Production Tax Credits that expire on
December 31, 2020, will require improvements to the current construction methodology.”
294. In addition, SCANA mentioned the “five project focus areas” in its response to

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the ORS’s draft letter, but failed to describe all of the problems in those areas that made the
current schedule unreliable.  Just a few days earlier, SCANA’s nuclear team had written:  “The
percentage of schedule activities completed on time is well below the goal and does not allow for a
reliable Integrated Project Schedule.”  Yet, SCANA failed to include this or similar language in its
response to the ORS.
295. SCANA’s attempt to soften the language in ORS’s letter succeeded.  The letter that
ORS submitted to the PURC did not say that “ORS has no confidence that Unit 3 can meet the
Current Federal Production Tax Credit Deadline of December 31, 2020.”
Defendants Mislead the Nuclear Advisory Council
296. On July 13, 2016, Marsh received an e-mail from a member of the company’s
nuclear team regarding construction milestones for June 2016.  Marsh was told that Westinghouse
“completed 4 of the 27 projected milestones (14.8% complete 85.2% not complete).”  Another
SCANA nuclear team member noted that this was a “dismal performance.”
297. The same day, Santee Cooper’s CEO sent Marsh an e-mail regarding the lack of
progress on the project.  Santee Cooper’s CEO wrote:  “What has particularly frustrated Santee
Cooper from the date of the 2015 [EPC] Amendment is [Westinghouse’s] failure to seize an
opportunity and significantly ramp up construction progress at the site.  The primary purpose of
the fixed price option and milestone payment schedule is to incentivize [Westinghouse] to get the
units built.  Through the last 6 months, while [SCANA and Santee Cooper] have paid $600
million dollars, construction progress has only been an aggregate of 3%.  Moreover, for the June
billing period, had [SCANA and Santee Cooper] accepted [Westinghouse’s] milestones and
payment schedule, which contained twenty-seven milestones and requested payment of $156
million for the month, only four of the twenty-seven were completed, which would entitle

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[Westinghouse] to payment of just $23.1 million.  This rate of progress will never meet the
current completion schedule, impacting production tax credits, the availability of cheaper
energy for our customers, and bringing the costs of construction to conclusion.”   [Emphasis
added].
298. Marsh forwarded the e-mail from Santee Cooper’s CEO to Byrne on July 14, 2016.
299. That same day, Byrne appeared at one of the Nuclear Advisory Council’s meetings.
The Nuclear Advisory Council was a group that advised the Governor of South Carolina on issues
pertaining to nuclear activities in the state.  Byrne misleadingly testified at the meeting that Unit 2
and Unit 3 would be “online” and “making power” by August 2019 (Unit 2) and August 2020
(Unit 3), even though Byrne knew that the construction schedule was unreliable and the project
was significantly behind that schedule.
300. At the July 14, 2016 meeting, Byrne and a council member also engaged in the
following discussion:
Council:   What is your best estimate when you think you are going to be done?
Byrne:      We think the current schedule is achievable.  Their guaranteed substantial
completion date for us contractually is August 2019 for the first unit and 12
months later for the second.
Council:   Completed, does that mean online?
Byrne:   Yes that means on line, making power.
301. Byrne knew that his statements to the Nuclear Advisory Council were false.
Defendants Make False and Misleading Statements on SCANA’s
Second Quarter Earnings Call and in SCANA’s Quarterly Report

302. On July 21, 2016, Byrne attended a meeting with other members of SCANA’s
nuclear team and Westinghouse.  At the meeting, Westinghouse reported that the monthly percent

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complete percentages for March through June 2016 were still far below the 3% needed to complete
Unit 2 by August 2019 and Unit 3 by August 2020.
303. At this time, Byrne knew that eight months after entering into the EPC Amendment
the pace of construction was still lagging far behind where it needed to be for SCANA to complete
the new units on schedule.  More specifically, Byrne knew that for the first six months of 2016 the
monthly percent complete percentages were as follows:
MONTH EXPECTED PERCENT
COMPLETE
ACTUAL PERCENT
COMPLETE
January 2016 3% 0.3%
February 2016 3% 0.5%
March 2016 3% 0.6%
April 2016 3% 0.6%
May 2016 3% 0.7%
June 2016 3% 0.8%
TOTAL
18% 3.5%

304. One week later, on July 26, 2016, Marsh and Byrne attended SCANA’s quarterly
Board of Directors meeting.
305. At the meeting, Byrne presented a “New Nuclear Construction Update” that
highlighted the unreliability of the construction schedule and raised serious doubts about
SCANA’s ability to complete the expansion project in time to receive the production tax credits.
306. Byrne’s presentation addressed “Five Project Focus Areas,”  and stated:
• “The project does not have equipment and commodities that meet requirements
readily available to support construction work fronts.  This impacts the ability
of the project to reliably achieve schedule.”

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• “Modules are not being fabricated and delivered in accordance with the project
execution plan.  Modules are delivered later than the construction need date.  A
significant number of modules are delivered incomplete or with quality issues.
This requires outfitting, rework or repair at the project site that is not part of the
baseline schedule.”
• “The project does not adequately address constructability issues requiring
design changes or interpretations.  All engineering design is not finalized in
time to procure adequate material and plan work in advance of construction.
This adversely impacts the ability to reliably achieve schedule.”
• “The project does not have sufficient resources to support active construction
work fronts.  This impacts the ability of the project to reliably achieve schedule
or mitigate issues from engineering, procurement or constructability delays.”
• “The project performance factor (PF) is consistently above the goal and
trending in a negative direction.  The majority of project milestones are not met
on their scheduled dates.  The percentage of schedule activities completed on
time is well below the goal and does not allow for a reliable Integrated Project
Schedule.”
307. On the same day that Byrne was presenting this dire assessment of the project
schedule to SCANA’s Board of Directors, other members of SCANA’s nuclear team made a
presentation to the ORS regarding the status of the project that did not include any such language.
Instead, SCANA’s presentation to the ORS identified the same “Big Five Focus Areas”
(procurement, schedule, construction, engineering, and modules), but instead of noting the severe
problems in each area the SCANA nuclear team touted the progress being made in all of them.

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308. Just two days later, on July 28, 2016, Byrne made false and misleading statements
in SCANA’s second quarter earnings call with analysts.
309. An analyst from UBS Securities, LLC asked Byrne:  “So I wanted to follow up a
little bit on the timetable and schedule on the project and specifically on the milestones, if you
could provide a little bit more of an update there, and ultimately, if and/or when you expect to do –
or hear back from Flour [Westinghouse’s sub-contractor] as to more of an integrated schedule
update for the overall project.”
310. Byrne responded with the following misstatement:  “The guaranteed substantial
completion dates remain at August of 2019 for unit 2 and August of 2020 for unit 3.  We
don’t see anything to change those.  Fluor’s review of the schedule is really something that
should conclude somewhere in the third quarter and they will be giving that to Westinghouse. . . .  I
don’t expect anything to necessarily change from that review, save for perhaps the number of
hours it might take and shifts that they would have to put on, that kind of thing.  So the goal of that
schedule review was to hold the dates constant and see what it would take to accomplish those
dates.  So I don’t expect anything dramatic to come from that.”  [Emphasis added].
311. SCANA posted the transcript from the earnings call on its website.  In addition,
investors were allowed to listen to the call.
312. Following Byrne’s affirmation of the guaranteed substantial completion dates
during the July 28, 2016 earnings call, analysts issued reports emphasizing SCANA and its
senior executives’ confidence that Unit 2 and Unit 3 would be completed by August 2019 and
August 2020.  Analysts stated:
• “management remained resilient today on its project schedule”;

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• “importantly . . . the guaranteed substantial completion dates are not being
debated”;
•  “[m]anagement expressed confidence that the guaranteed substantial completion
dates of Aug. 2019 (Unit 2) and Aug. 2020 (Unit 3) are achievable”; and
• “[c]onstruction seems to be progressing on schedule to meet the completion dates
August 2019/2020 for Units 2 and 3” and  “SCG doesn’t expect major changes to
the schedule.”
313. On July 29, 2016, Marsh told the company’s board of directors in an e-mail that
Byrne and another executive “did a great job answering questions” on the earnings call.
314. On August 5, 2016, SCANA’s nuclear team, including Byrne, made another
misleading presentation to the ORS.  In particular, SCANA’s nuclear team failed to disclose the
significant problems in the five project areas that made the construction schedule unreliable and
Unit 2 and Unit 3 unlikely to be completed in time for SCANA to qualify for the tax credits.
315. Later in August 2016, just a few weeks after the earnings call, SCANA and Santee
Cooper argued before a Dispute Resolution Board that they should not have to pay Westinghouse
millions of dollars each month for work that Westinghouse was supposed to complete under the
construction schedule but had not done so.  The Dispute Resolution Board had been established to
resolve disputes between SCANA/Santee Cooper and Westinghouse.
316. At the hearing, Byrne made a presentation regarding the lack of progress by
Westinghouse on completing Unit 2 and Unit 3.  Byrne stated, among other things, that:  “The
transition to Fluor [a new sub-contractor] did not yield the improvements to PF [performance
factor] and ratios that [Westinghouse] had expected and the EAC contemplated”; SCANA and
Santee Cooper are “concerned that [Westinghouse] cannot complete the Project within the Fixed

65

Price Option”; and Westinghouse “has had schedule slippage and may be unable to complete Units
2 and 3 by the current GSCDs [guaranteed substantial completion dates], which could put tax
credits at risk.”
317. In other words, when Byrne spoke to financial analysts regarding the project, he
confidently touted the construction schedule and stated that the new nuclear units would be
completed in time to receive the production tax credits.  Around the same time, when Byrne spoke
to the Dispute Resolution Board about paying Westinghouse under the EPC Amendment, Byrne
expressed concern that Unit 2 and Unit 3 would not be completed in time for SCANA to receive
the production tax credits and noted that Westinghouse was not meeting the milestones in the
construction schedule that would allow the new units to be completed in time to do so.
318. On August 5, 2016, SCANA filed a Form 10-Q with the SEC that repeated the
same false and misleading statements that the company made in its earlier filings.  SCANA’s Form
10-Q also omitted the true status of the nuclear expansion project, including the unreliability of the
schedule and the serious doubts about the new units qualifying for the production tax credits.
319. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the
Sarbanes-Oxley Act, Marsh certified that he had reviewed the periodic filing and that it contained
no untrue statements.  Marsh knew, however, that his certification was false and misleading.
320. Similarly, Byrne knew that the information in SCANA’s periodic filing was false
and misleading.  Nevertheless, on August 5, 2016, Byrne signed a sub-certification letter in
connection with the filing that stated he had “no knowledge of any fraud or suspected fraud
affecting SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form
10-Q.
321. SCANA also repeated the same false and misleading statements in its BLRA

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Quarterly Report regarding the construction schedule, its oversight of the project, and its
disclosures to the PSC and ORS.  SCANA filed the report on August 12, 2016.
322. On August 31, 2016, SCANA published a press release titled, “SCE&G Achieves
History-Making Milestone With Placement of V.C. Summer Unit 2 Reactor Vessel.”  In the press
release, Marsh is quoted as saying:  “Successful placement of the Unit 2 reactor vessel is a very
significant milestone on our path to completing the construction of the two nuclear units.”
SCANA failed to disclose the true status of the project in its press release.
Defendants Make False and Misleading Statements at SCANA’S
“Media Day” and on SCANA’s Third Quarter Earnings Call

323. In 2016, SCANA established a Construction Oversight Review Board (“CORB”) to
assuage Santee Cooper’s concerns that SCANA’s management and oversight capabilities were
limited by its lack of expertise.  SCANA agreed to establish the CORB, which was supposed to
provide an independent assessment of the project’s progress, in return for Santee Cooper remaining
quiet about Bechtel’s findings.  As one SCANA executive described it:  “We agreed to the
CORB in return for flushing the Bechtel report.”
324. In September 2016, Marsh and Byrne each received copies of a draft report
prepared by the CORB.  The draft report had a negative assessment of the project’s status and
found that, as a result of continued delays, “[t]he Unit 2 and Unit 3 project schedules include
significant risks to achieve substantial completion.”  In fact, according to the report, “[t]he current
schedule for Unit 2 has slipped 5 months in a 6-month period[.]”
325. Two weeks after receiving the draft CORB report, Marsh and Byrne appeared at a
SCANA “Media Day” event to tout the progress being made on the project.
326. Representatives from several news organizations attended the event, including the
Associated Press, Charlotte Business Journal, and The State.  Each attendee received media kits

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that included the following written misrepresentation:  “The vast majority of the major components
and equipment have now been received on site, and the units are projected to be complete in
August 2019 and August 2020 respectively.”  Marsh and Byrne both received a copy of the media
kit, including this misrepresentation, the day before the event was held.
327. During the “Media Day” event, which was held on September 21, 2016, Marsh
misleadingly stated:  “This is a large project.  It’s a massive project, whatever term you want to put
on it.  It’s a long term project, and in projects of this nature you’re going to have some challenges
and issues.  We’ve had challenges and issues. . . .  We’ve been able to meet those challenges, make
adjustments to the contract, and continue progress on the project.”
328. Marsh also misleadingly stated that the company would qualify for more than $1
billion in production tax credits.  Marsh concluded his remarks by stating:  “We’re excited about
where we are.  We’ve had challenges.  We’ve been able to work through those challenges.”
329. Byrne also made false statements during the “Media Day” event.  Specifically,
Byrne falsely stated:  “The pace of this project is quickening.  We have run into some issues and
roadblocks in the past, most of those issues and roadblocks are behind us.”  Byrne then displayed
several photographs of the construction site to show progress being made on the project.  In fact,
the project was severely behind schedule and falling further behind schedule every month.
330. On September 22, 2016, Marsh submitted additional written testimony to the PSC
in which he falsely stated:  “  In [our update petition] filing, SCE&G proposed specific adjustments
to the construction schedule and capital cost schedules for the V.C. Summer Units 2 & 3 . . .
Through our pre-filed direct testimony, we presented evidence that the proposed adjustments were
reasonable, were amply justified by the evidence and were in no way the result of imprudence on
the Company’s part, which is the legal standard in these matters.”  This testimony was made

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publicly available shortly after it was filed.
331. Four days later, on September 26, 2016, Marsh and Byrne attended a meeting with
Westinghouse that included a discussion of the five focus areas (procurement, schedule,
construction, engineering, and modules) and the problems in all of those areas that were affecting
the reliability of the schedule and the ability to complete the new units on time.
332. On October 20, 2016, SCANA’s nuclear team, including Byrne, and Santee Cooper
personnel attended another meeting with Westinghouse regarding the lack of progress on the
expansion project.  At the meeting, a member of SCANA’s nuclear team noted that “there are so
many loose ends” that he doesn’t have “a high level of comfort that we will be successful.”
Another member of SCANA’s nuclear team noted that construction progress was still lagging
behind where it needed to be in order to complete the project on schedule.  In short, SCANA’s
nuclear team emphasized to Westinghouse that they need “more energy and commitment to
meeting schedule dates” and that they need to “look at how they are managing schedule
adherence.”
333. At the same meeting, an executive from Santee Cooper questioned whether
achieving the required monthly progress necessary to complete Unit 2 and Unit 3 under the
schedule was “a pipe dream” and if they will “ever get there.”
334. A week later, on October 27, 2016, Byrne participated in SCANA’s third quarter
earnings call.  In a PowerPoint presentation for the call, Byrne misleadingly noted that the “new in
service date[]” for Unit 2 was August 31, 2019, and for Unit 3 was August 31, 2020.  At the time
he made these statements, Byrne knew that neither unit would be completed by those dates.  Byrne
also indicated that a recent agreement with the ORS “supports the approval of the revised
construction and capital cost schedules.”  Byrne failed to disclose that SCANA had withheld

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information from the ORS, including that SCANA’s own nuclear team had determined that the
schedule was unreliable and that SCANA’s senior management had informed the company’s
Board of Directors of that determination.
335. On the call, Byrne further stated that SCANA was “very happy with what Fluor
[Westinghouse’s new sub-contractor] is doing for us” and that “they’ve been very successful
recently.”
336. SCANA posted the transcript from the earnings call and the PowerPoint
presentation on its website.  In addition, investors were allowed to listen to the earnings call.
337. On November 4, 2016, SCANA filed a Form 10-Q with the SEC that repeated the
same false and misleading statements that the company made in its earlier filings.
338. SCANA’s Form 10-Q also omitted the true status of the nuclear expansion project,
including the unreliability of the schedule and the serious doubts about the new units qualifying for
the production tax credits.
339. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the
Sarbanes-Oxley Act, Marsh certified that he had reviewed the periodic filing and that it contained
no untrue statements.  Marsh knew, however, that his certification was false and misleading.
340. In addition, Byrne knew that the information in SCANA’s periodic filing was false
and misleading.  Nevertheless,  on November 4, 2016, Byrne signed a sub-certification letter in
connection with the filing that falsely stated he had “no knowledge of any fraud or suspected fraud
affecting SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form
10-Q.
Defendants Make False and Misleading Statements
on SCANA’s Fourth Quarter Earnings Call

341. On November 7 and 8, 2016, Marsh and other executives from SCANA attended

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the EEI Financial Conference in Scottsdale, Arizona.  The EEI Financial Conference involved,
among other things, meetings between SCANA executives and financial analysts.
342. At the EEI Financial Conference, SCANA executives utilized an “Investor
Presentation” that addressed various topics, including the expansion project at V.C. Summer.
SCANA’s Investor Presentation contained several false and misleading statements about the
project.  Specifically, the presentation touted the “August 2019” and “August 2020” completion
dates for Unit 2 and Unit 3, even though SCANA and its senior executives knew that the schedule
was unreliable.
343. On November 16, 2016, SCANA’s nuclear team met with representatives from
Westinghouse to discuss the expansion project.  Notes from the meeting reflect that a member of
SCANA’s nuclear team observed that at the current rate of progress it would take an additional
seven years to complete Unit 2 – i.e., well beyond what SCANA and its senior executives,
including Marsh and Byrne, had publicly acknowledged and far past the deadline for receiving the
production tax credits.
344. On November 22, 2016, SCANA’s senior executives, including Marsh and Byrne,
attended a meeting to discuss the possible release of Bechtel’s Final Report.  According to an
e-mail sent after the meeting, Marsh and Byrne were “adamantly opposed to th[e] release” of the
report.
345. That same day, Marsh and Byrne, along with representatives from Santee Cooper,
attended a “CORB Debrief” meeting regarding the project.  The CORB reached many of the same
conclusions regarding the expansion project as Bechtel had reached a year earlier.
346. According to Byrne’s notes from the meeting, Santee Cooper’s CEO asked a
CORB member:  “Is there a fully integrated proj schedule that takes proj to completion?”  The

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CORB Chairman answered, “No.”  Another executive from Santee Cooper then asked whether
they have the “right people” in Westinghouse and the new sub-contractor (Fluor).  The CORB
Chairman answered, “Probably Not.”  Finally, another CORB member succinctly stated:  “Still
don’t have realistic sked,” meaning that even after several years of construction and the
expenditure of several billion dollars, there still was not a realistic project schedule to complete the
new nuclear units.
347. A draft written report followed the CORB “debrief.”  The draft report, which Marsh
received a copy of, was critical of SCANA’s oversight of the expansion project.  The draft report
noted that SCANA’s “oversight is insufficient for some project activities, including:  the Project
Execution Strategy, prioritization of project tasks, schedule performance, contract administration,
and performance monitoring.”
348. On November 28, 2016, Santee Cooper’s CEO sent an e-mail to Marsh regarding
the overall management of the nuclear expansion project.  Byrne received a copy of the e-mail as
well.  In the e-mail, Santee Cooper’s CEO expressed “frustration” at the lack of “project
management expertise in large scale EPC construction.”  Santee Cooper’s CEO stated, similar to
what Bechtel had found, that SCANA did not have the expertise necessary to oversee a mega-
project like the V.C. Summer expansion.
349. In addition, Santee Cooper’s CEO indicated in his e-mail that he wanted to release
publicly Bechtel’s Final Report.
350. A week after the CORB debriefed SCANA’s senior management, the PSC
approved SCANA’s petition to adopt the fixed price option and make August 2019 and August
2020 the substantial completion dates for Unit 2 and Unit 3.  The PSC specifically referred to
Byrne’s testimony in concluding that the revised completion dates were “reasonable forecasts of

72

the time required for completing the Units and supported by the evidence of record in this
proceeding.”
351. Between the time SCANA filed the petition on May 26, 2016, and the PSC’s ruling
on November 28, 2016, however, SCANA and its senior executives failed to correct their false and
misleading statements regarding the reliability of the construction schedule and the likelihood of
receiving the federal tax credits.  To the contrary, they repeatedly touted the unrealistic completion
dates and the production tax credits that SCANA was not going to receive at the current rate of
progress on the project.
352. On December 15, 2016, Byrne attended another meeting with Santee Cooper and
Westinghouse to discuss the expansion project.  At the meeting, a Santee Cooper executive
expressed concern about the lack of progress each month and stated:  “if you do the math it’s
hard to see that we are going to get there.”  [Emphasis added].
353. Byrne’s own handwritten notes from the meeting expressed the same sentiment:
“Doesn’t seem to be plan to improve % complete – Need 2x-3x.”  In other words, Westinghouse
would need to double or triple the rate of progress on the project to meet the deadlines in the
schedule, which is something Westinghouse had been unable to do during the multi-year project.
354. SCANA nevertheless continued issuing press releases that touted progress being
made on the project.  For example, on December 19, 2016, SCANA published a press release
entitled, “SCE&G Sets 2.4 Million Pound Module for V.C. Summer Unit 3.”  In the press release,
SCANA stated:  “To see this nuclear construction milestone and more, visit SCE&G on Flickr and
YouTube.”
355. On December 27, 2016, Westinghouse’s parent company, Toshiba Corporation,
publicly announced that the cost to complete the nuclear expansion project would far surpass the

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original estimates.
356. That same day, Marsh participated in a call with Westinghouse regarding the
project.  Marsh wrote in his notes from the call:  “Schedules unrealistic.”  [Emphasis added].
357. On December 29, 2016, Byrne and Santee Cooper’s Senior Vice President for
Nuclear Energy met with a representative from Westinghouse’s sub-contractor (Fluor) at a coffee
shop.  According to the Santee Cooper executive’s notes from the meeting, Westinghouse’s sub-
contractor stated that Westinghouse was still using mandatory constraints to hold the schedule to
artificial completion dates.  In other words, Westinghouse would not allow its sub-contractor to
create a re-baselined schedule to determine when the new units would actually be completed.  This
is essentially what Bechtel had noted more than a year earlier.  Marsh received a copy of the
Santee Cooper executive’s notes from the meeting a few days later.
358. On January 4, 2017, Marsh and Byrne received an e-mail from Santee Cooper’s
CEO that included a list of “proposed issues” to raise at a planned meeting with Westinghouse on
January 6, 2017.  In terms of the construction schedule, Santee Cooper’s CEO wrote:  “Current
production factors, which are in decline, render meeting the stated project schedule an
impossibility.”  [Emphasis added].
359. On January 6, 2017, SCANA’s senior management, including Marsh and Byrne,
attended the meeting with Santee Cooper and Westinghouse to discuss the deteriorating status of
the expansion project.  According to Byrne’s notes, Marsh asked, “How did we get here?”  Marsh
went on to recognize that the schedule has “a lot more risk in it” than previously acknowledged
publicly and that Westinghouse’s sub-contractor estimates additional delays.  Santee Cooper’s
CEO observed that it would be a “disaster” to send their regulator a schedule that “is
unbelievable.”  Marsh’s own notes reflect that Westinghouse “did not confirm 2020,” meaning that

74

Westinghouse did not commit to completing the new nuclear units in time for SCANA to qualify
for the production tax credits.
360. Five days later, on January 11, 2017, SCANA published another misleading press
release entitled, “SCE&G Places First AP1000 Steam Generator in the U.S.”  In the press release,
SCANA touted progress being made on the expansion project and directed investors to the website,
www.scana/com/investors/nuclear-development, to “see this nuclear construction milestone and
more[.]”
361. On February 14, 2017, SCANA issued a press release stating that Westinghouse
and its parent company, Toshiba, “are committed to completing the two new” nuclear units “being
constructed in Jenkinsville, SC.”  SCANA also misleadingly stated that Westinghouse provided it
with “revised in-service dates of April 2020 and December 2020 for Units 2 and 3, respectively,”
and that the revised schedule “would enable both units to qualify . . . for the federal production tax
credits.”  SCANA and its senior executives knew that this revised schedule was not realistic.  The
same day, SCANA filed a Form 8-K with the SEC providing the same misleading information.
362. Two days later, on February 16, 2017, Byrne and Marsh participated in SCANA’s
fourth quarter earnings call.  According to SCANA’s Chief Financial Officer, it was important for
SCANA’s CEO (Marsh) to be on the call because of the “severity of the situation.”
363. On the call, Byrne sought to assuage concerns regarding the continued viability of
the project.  Byrne misleadingly described progress being made on the project and referred to
photographs of the construction site to show work that had been completed.  Byrne misleadingly
stated:  “As you can see, we’ve made significant progress in just under 14 months.”  Byrne failed
to disclose that the project had fallen even further behind schedule during the past year.
364. Byrne also provided false and misleading information about the status of the project

75

schedule and the receipt of production tax credits when he answered questions from analysts.  For
example, Byrne had the following discussion with one analyst:
 Analyst:   When do you have to get them in service to ensure you qualify both for
the production tax credits and for bonus depreciation?  And does that date differ for
either of those?
 Byrne:     Well, Michael, this is Steve.  For the production tax credit basis, we have
to have them operating by 2021.
       ****
 Analyst:   Okay.  So in the situation, they’re already pushing Unit 3 out, assuming
be [sic] schedule they submitted holds and what’s in the BLRA filing, assuming
Unit 3 is December 2020,  if that pushes out another couple of months, sometime
between now and then, it’s conceivable that unit wouldn’t qualify for PTC?
 Byrne:    That possibility exists.  There are a couple things that are yet undefined
relative to – or untested relative to qualification for production tax credits.  One is,
what is the definition of in service, because certainly we’ll be making some power
from those units prior to declaring it in service.  So if making power qualifies, then
we’ll be ahead of those dates.  So that just gives us a little bit more room on the
order of two months.
365. Byrne had the following discussion with another analyst:
 Analyst:   Okay.  It doesn’t sound like any of this stuff is insurmountable.  It sounds
like blocking and tackling.  So am I correct in assuming that you guys feel like
efficiency improvements are readily achievable?
 Byrne:      Yes.  I think the improvements that they’ve laid out to us.  Now, they’ve

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got to go out and get the expertise they’re talking about.  I know they’re at it right
now.  They’re looking at all kinds of options, and we are encouraging [sic] to
include all kinds of options, including the possibility that we’ll have Toshiba
resources on the site.”
366. Another analyst asked Byrne:  “Given the new timelines released, obviously,
recently what’s your level of confidence against these timelines, particularly given some of the
risks around further delay on the second [new] unit [Unit 3]?  Do you have any sense on that?”
367. Byrne responded:  “Yes.  So what we’ve seen so far is that the efficiency factors
have increased significantly on Unit 3, our second new unit.  In some cases it’s a matter of hours,
in other cases, it’s double or triple the efficiency factor for the second unit . . . and it’s going much,
much more smoothly.  So I have reasonable confidence in the efficiency gains for the second new
unit.”  By “efficiency gains,” Byrne was referring to improving the rate of construction for Unit 3.
Byrne failed to disclose, however, that Unit 3 still would not be completed in time to qualify for
the production tax credits.
368. Marsh did not correct any of Byrne’s false and misleading statements on the call.
Instead, Marsh also sought to reassure investors by misleadingly stating that “we still anticipate
completing our two new nuclear units, which will enable us to provide our customers with safe,
reliable energy for decades to come. . . . As you can see from Steve [Byrne’s] update, we are
making substantial progress on these new plants and remain focused on continued progress toward
their completion.”
369. SCANA posted the transcript from the earnings call on its website along with a
PowerPoint presentation that included “revised in-service dates” of “April 2020 and December
2020 for Unit 2 and Unit 3, respectively.”  In addition, investors were allowed to listen to the call.

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370. On February 24, 2017, SCANA filed a Form 10-K with the SEC that failed to
disclose the true status of the expansion project.
371. SCANA’s Form 10-K misleadingly stated:  “Based on current tax law and the
contractual guaranteed substantial completion dates (and the recently revised forecasted dates of
completion) provided above [April 2020 and December 2020], both New Units would be
operational and would qualify for the nuclear production tax credits; however, any further delays
in the schedule or changes in tax law could adversely impact these conclusions.”
372. SCANA’s Form 10-K omitted a fair and full description of the status of the nuclear
expansion project, including the unreliability of the schedule and the serious doubts about the new
units qualifying for the production tax credits.
373. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the
Sarbanes-Oxley Act, Marsh certified that he had reviewed the periodic filing and that it contained
no untrue statements.  Marsh knew, however, that his certification was false and misleading.
374. Byrne also knew that the information in SCANA’s periodic filing was false and
misleading.  Nevertheless, on February 24, 2017, Byrne signed a sub-certification letter in
connection with the filing that falsely stated he had “no knowledge of any fraud or suspected fraud
affecting SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form
10-K.
Defendants Continue Making False and Misleading
Statements as SCANA Abandons the Project

375. On March 29, 2017, Westinghouse filed for bankruptcy.
376. That same day, Marsh and Byrne spoke on an analyst call regarding the project and
Westinghouse’s bankruptcy announcement.  Marsh began by falsely stating:   “We’ve been
transparent on this project since day one and we’re not going to change that.”

78

377. Marsh went on to say that work would continue on the project during a 30-day
transition and evaluation period and that “construction at the site will continue toward completion
of the units, with approximately 5,000 workers on site daily.”  Marsh also stated that “[a]t this
time, we expect that the resources available from Westinghouse and Toshiba, including its parental
guarantee, are adequate to compensate us for the Westinghouse estimate of additional cost.”
378. On the call, Byrne also falsely stated that going forward productivity should
increase at the construction site and that there was “no change” to the latest schedule, even though
Byrne knew that the schedule was unreliable and the lead contractor was entering bankruptcy.
379. Two weeks later, on April 12, 2017, Marsh and Byrne provided an ex parte briefing
to the PSC.  Marsh and Byrne both sought to allay concerns over the continued viability of the
project.  In particular, Byrne testified that “in spite of the bankruptcy, work continues on-site
without substantial disruption.”
380. Marsh and Byrne also told the PSC that SCANA was evaluating how to proceed,
including whether to complete both new nuclear units, complete only one of the new nuclear units,
or abandon the project.
381. On April 27, 2017, Byrne participated in SCANA’s first quarter earnings call.
Byrne spoke about progress being made on the project, referring to several photographs of the
construction site to show Unit 2 and Unit 3 being closer to completion, and he noted that
“productivity is largely unchanged.”  Byrne reiterated that they thought the cost to complete Unit 2
and Unit 3 would be covered by Westinghouse and Toshiba (through its parental guarantee).
Byrne also noted that SCANA planned to extend its evaluation period by an additional sixty days.
382. SCANA posted the transcript from the earnings call on its website.  In addition,
investors were allowed to listen to the call.

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383. Based on its evaluation of the project, SCANA determined that it would take
several more years and require s ubstantial additional funding to complete Unit 2 and Unit 3.
SCANA also determined that neither new nuclear unit would be completed in time to qualify for
the production tax credits.
384. On July 12, 2017, Santee Cooper’s Senior Vice President for Nuclear Energy sent a
letter to Byrne that expressed “significant concerns with the estimate” for completing the project.
Specifically, Santee Cooper thought that even SCANA’s revised estimated cost and completion
schedule “could be understated by an order of magnitude – one billion dollars low and 18 months
short[.]”  In sum, Santee Cooper thought that SCANA’s cost and schedule estimates were
“unrealistic.”  Marsh and Byrne received a copy of the letter on July 13, 2017.
385. On July 31, 2017, SCANA announced that it was abandoning the nuclear expansion
project at V.C. Summer.  SCANA publicly stated that even if the project went forward Unit 2
would not be in service until December 2022 and Unit 3 would not be in service until March 2024
– i.e., years after the deadline for receiving the production tax credits.  In addition, SCANA
announced that the cost of completing the new nuclear units “materially exceeded” the amount of
Toshiba’s parental guarantee and the amount authorized by the PSC.
386. On August 1, 2017, SCANA filed a petition with the PSC in which the company
announced its intention to abandon the project.  In its petition, SCANA stated that it would cost
$8.8 billion to complete the new nuclear units, and that Unit 2 would not be complete until
December 31, 2022, and Unit 3 would not be complete until March 31, 2024.  In its petition,
SCANA requested that the PSC find its decision to abandon the project to be “reasonable and
prudent.”
387. On August 1, 2017, Marsh and Byrne testified before the PSC.  Byrne inexplicably

80

claimed that “[t]he construction work at the site has been progressing well,” even though the
project had essentially collapsed.  Later in his testimony, however, Byrne acknowledged that
neither Unit 2 nor Unit 3 would be completed before the January 1, 2021 deadline for receiving the
production tax credits.
388. In September 2017, the Governor of South Carolina – who had obtained a copy of
Bechtel’s Final Report from Santee Cooper – ordered that Bechtel’s Final Report be made public.
The report was made publicly available over the objection of SCANA.
389. Later in September 2017, SCANA’s senior management, including Marsh and
Byrne, testified before the South Carolina House Utility Ratepayer Protection Committee.  Marsh
and Byrne acknowledged in their testimony that the concerns raised by Bechtel in October 2015
had also been raised internally by SCANA’s nuclear team.  Yet, neither Marsh nor Byrne publicly
disclosed that information in 2015 or 2016.  To the contrary, Marsh and Byrne consistently
contradicted those findings in their public statements about the project.  Even in September 2017,
Marsh and Byrne misleadingly claimed that SCANA would still be building Unit 2 and Unit 3 if
Westinghouse had not declared bankruptcy.  In fact, SCANA and its senior management, including
Marsh and Byrne, knew before Westinghouse declared bankruptcy that the project schedule was
unreliable and that the new nuclear units would not be completed in time to qualify for the
production tax credits.
390. In addition, Marsh falsely testified before the South Carolina Senate’s Nuclear
Project Review Committee that the schedule SCANA submitted to the PSC “was appropriate based
on the facts we knew at the time” and that SCANA “never gave [the PSC] a schedule that we
didn’t believe in.”
391. At around this time, SCANA’s market capitalization had decreased to

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approximately $7 billion.
392. SCANA’s false and misleading statements regarding the nuclear expansion project
at V.C. Summer caused substantial losses to SCANA’s investors and customers.  Investors were
misled about the true status of the project at the time they invested in SCANA.  These investors
lost hundreds of millions of dollars as a result of SCANA’s fraud.  In addition, SCANA’s energy
customers lost well over $1 billion in higher rates that SCANA had been allowed to charge them to
help recoup the significant financing costs associated with the project.
393. Marsh and Byrne both resigned from SCANA at the end of 2017.
394. On January 14, 2019, the PSC ruled that SCANA had acted imprudently from
March 12, 2015 forward by misleading the PSC, ORS, the public, and investors regarding the
true condition of the V.C. Summer expansion project and by failing to disclose the existence and
content of the Bechtel assessment.
395. The new nuclear units at V.C. Summer remain unfinished.
COUNT I – FRAUD

Violations of Section 17(a)(1) of the Securities Act
[15 U.S.C. § 77q(a)(1)]
(Against All Defendants)

396. Paragraphs 1 through 395   are re-alleged and incorporated herein by reference.
397. Defendants, acting with scienter, in the offer or sale of securities and by the use of
means or instruments of transportation or communication in interstate commerce or by the use of
the mails, directly or indirectly, employed a device, scheme, or artifice to defraud.
398. By reason of the foregoing, Defendants, directly and indirectly, have violated and,
unless enjoined, will continue to violate Section 17(a)(1) of the Securities Act [15 U.S.C.
§ 77q(a)(1)].

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COUNT II – FRAUD

Violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act
[15 U.S.C. §§ 77q(a)(2) and (3)]
(Against All Defendants)

399. Paragraphs 1 through 395 are re-alleged and incorporated herein by reference.
400. Defendants, acting knowingly, recklessly, or negligently in the offer or sale of
securities and by the use of means or instruments of transportation or communication in interstate
commerce or by the use of the mails, directly or indirectly, (a) obtained money or property by
means of untrue statements of material fact or by omitting to state material facts necessary in order
to make the statements made, in light of the circumstances under which they were made, not
misleading; and (b) engaged in transactions, practices, or a course of business which operated or
would have operated as a fraud or deceit upon the purchaser.
401. By reason of the foregoing, Defendants, directly and indirectly, have violated and,
unless enjoined, will continue to violate Sections 17(a)(2) and 17(a)(3) of the Securities Act [15
U.S.C. §§ 77q(a)(2) and 77q(a)(3)].
COUNT III – FRAUD
Violations of Section 10(b) of the Exchange Act
and Rules 10b-5(a), (b), and (c) thereunder
[15 U.S.C. § 78j(b), 17 C.F.R. §§ 240.10b-5(a), (b), and (c)]
(Against All Defendants)

402. Paragraphs 1 through 395 are re-alleged and incorporated by reference herein.
403. Defendants, acting with scienter and in connection with the purchase or sale of
securities and by the use of any means or instrumentality of interstate commerce or by use of the
mails or any facility of any national securities exchange, directly or indirectly, (a) employed a
device, scheme, and artifice to defraud; (b) made untrue statements of material fact or omitted to
state material facts necessary in order to make the statements made, in light of the circumstances

83

under which they were made, not misleading; and (c) engaged in acts, practices, or a course of
business which operated or would have operated as a fraud or deceit upon sellers, purchasers, or
prospective purchasers of securities.
404. By engaging in the conduct described above, Defendants violated, and unless
enjoined will continue to violate, Section 10(b) of the Exchange Act and Rule 10b-5(a), (b), and (c)
thereunder [15 U.S.C. § 78j(b), 17 C.F.R. § 240.10b-5].
COUNT IV – AIDING AND ABETTING (FRAUD)
Aiding and Abetting Violations of Section 17(a) of the Securities Act
[15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act
[15 U.S.C. § 78j(b)], and Rules 10b-5(a), (b), and (c) thereunder
[17 C.F.R. §§ 240.10b-5(a), (b), and (c)]
(Against Defendants Marsh and Byrne)

405. Paragraphs 1 through 395 are re-alleged and incorporated by reference herein.
406. As alleged above, SCANA violated Section 17(a) of the Securities Act [15 U.S.C.
§ 77q(a)] and Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rules 10b-5(a), (b), and
(c) thereunder [17 C.F.R. §§ 240.10b-5(a), (b), and (c)].
407. Defendants Marsh and Byrne knew, or recklessly disregarded, that SCANA’s
conduct was improper and knowingly rendered to SCANA substantial assistance in its illegal
conduct as described above.
408. By reason of the foregoing, Defendants Marsh and Byrne aided and abetted
violations of and, unless enjoined, will continue to aid and abet violations of Section 17(a) of the
Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and
Rules 10b-5(a), (b), and (c) thereunder [17 C.F.R. §§ 240.10b-5(a), (b), and (c)].
COUNT V – REPORTING PROVISIONS VIOLATIONS

Violations of Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)]
and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder [17 C.F.R. §§ 240.12b-20,

84

240.13a-1, 240.13a-11, and 240.13a-13] by SCANA and SCE&G,
and Aided and Abetted by Marsh
(Against Defendants SCANA Corporation, SCE&G, and Marsh)

409. Paragraphs 1 through 395 are re-alleged and incorporated herein by reference.
410. Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)] and Rules 12b-20, 13a-1,
13a-11, and 13a-13 thereunder [17 C.F.R. § 240.12b-20, 240.13a-1, 240.13a-11, and 240.13a-13],
require issuers of registered securities to file with the Commission factually accurate quarterly,
annual, and current reports.
411. As described above, Defendants SCANA and SCE&G violated, and unless enjoined
will continue to violate, Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and
13a-13 thereunder, by filing quarterly, annual, and current reports that were materially false and
misleading, and failed to include, in addition to the information expressly required to be stated in
such reports, such further information as was necessary to make the statements made, in light of the
circumstances in which they were made, not misleading.
412. Defendant Marsh aided and abetted SCANA Corporation’s and SCE&G’s violations
of Section 13(a) and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder by knowingly or
recklessly providing substantial assistance to SCANA Corporation and SCE&G in its violations of
those provisions, and unless enjoined Defendant Marsh will continue to aid and abet violations of
Section 13(a) and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder.
COUNT VI – FALSE CERTIFICATIONS

Violations of Exchange Act Rule 13a-14 [17 C.F.R. § 240.13a-14]
(Against Defendant Marsh)

413. Paragraphs 1 through 395 are re-alleged and incorporated herein by reference.
414. Exchange Act Rule 13a-14 requires an issuer’s principal executive and financial
officer to certify in each quarterly and annual report filed or submitted by the issuer under Section

85

13(a) of the Exchange Act that:  (1) they have reviewed the report; and (2) based on their
knowledge, the report does not contain any untrue statement of material fact, or omit to state a
material fact necessary in order to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by the report.
415. Marsh signed and submitted the required certifications in this case in connection
with SCANA Corporation’s and SCE&G’s filings with the Commission as described above.
Marsh’s certifications, however, contained untrue statements of material fact and also omitted to
state material facts necessary to make the statements he made therein not misleading.
416. By reason of the foregoing, Marsh violated and, unless enjoined, will continue to
violate Exchange Act Rule 13a-14 [17 C.F.R. § 240.13a-14].
PRAYER FOR RELIEF
 The Commission respectfully requests that this Court:
1. Find that Defendants committed the violations alleged herein;
2. Permanently enjoin Defendants and each of their agents, employees, and
attorneys, and any other person or entity in active concert or participation with him who receives
actual notice of the injunction by personal service or otherwise, from directly or indirectly
engaging in conduct in violation of, as appropriate, Section 17(a) of the Securities Act [15 U.S.C.
§ 77q(a)]; Section 10(b) of the Exchange Act and Rule 10b-5 thereunder [15 U.S.C. § 78j(b) and
17 C.F.R. § 240.10b-5]; and Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)] and Rules
12b-20, 13a-1, 13a-11, 13a-13, and 13a-14 thereunder [17 C.F.R. § 240.12b-20, 240.13a-1,
240.13a-11, 240.13a-13, and 240.13a-14].
3. Order Defendants to disgorge all ill-  gotten gains in the form of any benefits of
any kind derived from the illegal conduct alleged in this Complaint, plus pay prejudgment

86

interest;
4. Order Defendants to pay civil penalties pursuant to Section 20(d) of the Securities
Act [15 U.S.C. § 77t(d)] and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)] in an
amount to be determined by the Court;
5. Issue an Order pursuant to Section 20(e) of the Securities Act [15 U.S.C.
§ 77t(e)], Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)], Section 21(d)(5) of the
Exchange Act [15 U.S.C. § 78u(d)(5)], and the inherent equitable powers of this Court,
prohibiting Defendants Marsh and Byrne from acting as an officer or director of any issuer
whose securities are registered with the Commission pursuant to Section 12 of the Exchange Act
or which is required to file reports with the Commission pursuant to Section 15(d) of the
Exchange Act;
6. Retain jurisdiction of this action in accordance with the principles of equity and
the Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders
and decrees that may be entered, or to entertain any suitable application or motion by the
Commission for additional relief within the jurisdiction of this Court; and
7. Order such other and further relief as this Court may deem just, equitable, and
appropriate in connection with the enforcement of the federal securities laws and for the
protection of investors.
JURY TRIAL DEMAND
The Commission demands a trial by jury on all issues that may be so tried.

Dated: February 27, 2020  Respectfully submitted,
     Nathan S. Williams
Attorney for the United States

87

Acting Under Authority Conferred by 28 U.S.C. § 515

By:  /s/ Beth C. Warren
JAMES LEVENTIS (#9406)
BETH C. WARREN (#11360)
Assistant United States Attorneys
1441 Main Street, Suite 500
Columbia, South Carolina 29201
Telephone (803) 929-3037
E-mail: [email protected]

     M. Graham Loomis*
     Harry B. Roback*
     John O’Halloran*
     U.S. Securities and Exchange Commission
     950 East Paces Ferry Road, NE, Suite 900
     Atlanta, GA 30326
     (404) 942-0690 (Roback)
     [email protected]

     *Application for admission pro hac vice forthcoming

UNITED STATES DISTRICT COURT 
DISTRICT OF SOUTH CAROLINA 

COLUMBIA DIVISION 
 

 
UNITED STATES SECURITIES AND 
EXCHANGE COMMISSION, 
 
                    Plaintiff, 
 
                    v. 
 
SCANA CORPORATION, 
 
DOMINION ENERGY SOUTH 
CAROLINA, INC. (f/k/a SOUTH 
CAROLINA ELECTRIC & GAS 
COMPANY), 
 
KEVIN B. MARSH, and 
 
STEPHEN A. BYRNE, 
      
                    Defendants. 
 

 
 
 
 
 
 
Civil Action No. ___________ 
 
Jury Trial Demanded 

 
COMPLAINT 

 
 Plaintiff United States Securities and Exchange Commission (“SEC” or “Commission”) 

alleges as follows: 

SUMMARY OF ACTION 

1. This case arises out of a historic securities fraud perpetrated by senior executives 

at SCANA Corporation and its subsidiary South Carolina Electric & Gas Company (“SCE&G”) 

(jointly referred to as “SCANA”).  SCANA and its senior executives repeatedly deceived 

investors, regulators, and the public over several years about the status of a $10 billion nuclear 

energy project.  When the truth was revealed, it resulted in hundreds of millions of dollars in 

losses to SCANA’s investors and to South Carolinians. 

3:20-cv-00882-MGL

3:20-cv-00882-MGL     Date Filed 02/27/20    Entry Number 1     Page 1 of 87



2 
 

2. The project at issue was the failed expansion of the Virgil C. Summer Nuclear 

Station in Jenkinsville, South Carolina (“V.C. Summer”).  The planned expansion at V.C. 

Summer was one of the largest and most expensive construction projects in South Carolina 

history.  The project began in 2008 when SCANA, which already operated one nuclear unit at 

V.C. Summer (Unit 1), announced its intention to build two new nuclear units at the plant (Unit 2 

and Unit 3).  SCANA began constructing the new units in 2013, but the project was plagued by 

substantial delays and cost overruns.  In July 2017, these problems were so pervasive that after 

five years of planning and development, four years of construction, and a total of $9 billion 

expended, SCANA abandoned the project without completing either new nuclear unit. 

3. From 2015 through 2017, construction of the new nuclear units at V.C. Summer 

was a tale of two projects.  Publicly, SCANA touted progress being made on the project in its 

periodic filings with the SEC, on earnings calls with financial analysts, in press releases and 

video presentations, and in filings and testimony before the South Carolina Public Service 

Commission (“PSC”).  These false statements enabled SCANA to bolster its stock price, sell $1 

billion in corporate bonds at favorable rates, and obtain regulatory approval to charge its 

customers more than $1 billion in increased rates to help finance the project.  Internally, 

however, SCANA knew that – contrary to its public statements – the project was significantly 

delayed, the construction schedule was unreliable and unachievable, and the company was 

unlikely to qualify for $1.4 billion in federal production tax credits because the new units would 

not be completed by the January 1, 2021 deadline for receiving the tax credits.  SCANA and its 

senior management knew that the expansion project was not viable without those tax credits. 

4. SCANA’s senior management, including Defendants Kevin B. Marsh (“Marsh”) 

and Stephen A. Byrne (“Byrne”), were at the center of this fraud.  Marsh was the Chief 

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Executive Officer of SCANA and the Chairman of the Board of Directors for SCANA 

Corporation and SCE&G.  He was directly involved in overseeing the expansion project at V.C. 

Summer.  Byrne was SCANA Corporation’s Executive Vice President and SCE&G’s President 

of Generation and Transmission and Chief Operating Officer.  Byrne’s responsibilities included 

overseeing all nuclear operations for SCANA, including construction of the new nuclear units at 

V.C. Summer.  As such, Marsh and Byrne were well aware of the delays in the project, the ongoing 

problems with the schedule, and the likelihood that SCANA would not qualify for the tax credits. 

5. Construction on the new nuclear units began in March 2013.  SCANA initially 

projected that Unit 2 would be completed by 2016 and Unit 3 would be completed by 2019.  As 

early as September 2013, however, the construction schedule was already delayed significantly.  

Those delays continued throughout 2014. 

6. By 2015, Westinghouse Electric Company (“Westinghouse”) – the lead contractor 

on the project – had revised its schedule to have Unit 2 completed by June 2019 and Unit 3 

completed by June 2020.  SCANA’s senior management knew, however, that the project was 

substantially behind even this revised schedule, that the revised schedule was unreliable, and that 

SCANA was unlikely to qualify for the federal production tax credits. 

7. In fact, SCANA’s nuclear team, which Byrne oversaw, wrote in a memorandum 

dated April 28, 2015: (i) Westinghouse “has no credibility for developing a realistic schedule;” 

(ii) SCANA has “no confidence in [Westinghouse’s] ability to complete Unit 3 by the end of 

2020 and suspects that production tax credits are in jeopardy for that unit;” and (iii) “[t]he 

continued failure to meet schedule (Unit 2 now at least 39 months late, and Unit 3 at least 18 

months late . . . ) has severely impacted credibility and has placed ongoing regulatory and 

financial support in jeopardy.”  At that time, SCANA’s senior management also knew that at the 

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current rate of progress only 30% of the project would be completed by 2020. 

8. Despite knowing that the schedule was unreliable and the tax credits were at risk, 

SCANA’s senior management publicly touted the construction schedule and the company 

receiving $1.4 billion in federal tax credits for the expansion project.  For example, just two days 

after receiving the above memorandum, Byrne misleadingly stated on SCANA’s first quarter 

earnings call that “the [revised] construction schedule . . . includes a substantial completion date 

of June of 2019 for Unit 2 and June of 2020 for Unit 3.”  Also, in May 2015, Byrne falsely 

testified before the PSC (SCANA’s regulator):  “I can affirm that these schedules represent the 

best and most definitive forecast of the anticipated costs and construction schedule required to 

complete this project that is available[.]”  Marsh also testified before the PSC that the “current 

schedules reflect the best information available about the anticipated costs and construction 

timetables for completing the project,” even though he knew those statements were not true. 

9. Later in 2015, given the significant delays that had occurred to date, SCANA 

retained Bechtel Power Corporation (“Bechtel”) to conduct a third-party assessment of the 

project.  In October 2015, Bechtel presented its initial findings to SCANA’s senior management, 

including Marsh and Byrne.  Bechtel stated that even under the best case scenario Unit 2 would 

not be completed until between December 2020 and August 2021 and Unit 3 would not be 

completed until between June 2022 and June 2023.  These projections meant that SCANA would 

likely not qualify for some, or perhaps any, of the $1.4 billion federal tax credits.  Bechtel also 

concluded that SCANA’s schedule for completing the expansion project was unrealistic. 

10. SCANA and its senior management concealed the fact that the construction 

schedule was unreliable and that the company likely would not qualify for some, or perhaps any, 

of the $1.4 billion in tax credits.  Indeed, throughout the duration of the project, SCANA’s senior 

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management, including Marsh and Byrne, failed to disclose these facts publicly. 

11. Instead, in October 2015, SCANA announced that it had entered into an amended 

agreement with Westinghouse and claimed that the new agreement resolved most of the 

problems with the project.  Despite Bechtel’s finding that the completion of Unit 2 and Unit 3 

would be delayed by 18 months to 3 years, however, the amended agreement moved the 

completion dates for the new units back by just 60 days.  Less than one month after receiving 

Bechtel’s findings, SCANA’s senior management, including Marsh and Byrne, testified before 

the PSC regarding the amended agreement.  Their testimony contradicted what they had recently 

been told by their own nuclear team and Bechtel. 

12. The nuclear expansion project fell even further behind schedule in 2016.  As 

SCANA’s nuclear team stated to SCANA’s senior management, including Marsh and Byrne:  “It 

would be a good idea to encourage and recognize meaningful progress and successes.  This is 

difficult to accomplish when the project is not seeing meaningful successes.” 

13. Despite the deteriorating status of the project, SCANA’s senior management 

continued making false and misleading statements to the public regarding the construction 

schedule and the production tax credits.  For example, during SCANA’s first quarter earnings 

call in April 2016, Byrne misleadingly touted significant progress being made on the project and 

presented several photographs of the construction site that purported to show that progress even 

though he knew the project had experienced additional delays. 

14. By the summer of 2016, the nuclear expansion project at V.C. Summer had fallen 

even further behind schedule.  On July 26, 2016, Byrne made a presentation at SCANA’s Board of 

Director’s meeting that recognized substantial problems in “Five Project Focus Areas.”  Byrne 

stated in the presentation, which was attended by Marsh:  “The majority of project milestones are 

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not met on their scheduled dates.  The percentage of schedule activities completed on time is well 

below the goal and does not allow for a reliable Integrated Project Schedule.”  

15. On SCANA’s second quarter earnings call just two days later, however, Byrne 

falsely stated:  “The guaranteed substantial completion dates remain at August of 2019 for unit 2 

and August of 2020 for unit 3.  We don’t see anything to change those.”  Byrne’s false statements 

had the desired effect, as analysts issued reports emphasizing the confidence SCANA’s senior 

management had in completing Unit 2 and Unit 3 in time to qualify for the production tax credits. 

16. By the end of 2016, SCANA and its senior management knew that the project was 

hopelessly behind schedule, that the schedule from Westinghouse was unrealistic, and that the 

company would not qualify for the federal production tax credits.  Despite this knowledge, 

SCANA’s senior management kept making false and misleading statements regarding the 

reliability of the construction schedule and the receipt of the tax credits. 

17. The nuclear expansion project at V.C. Summer continued to experience severe 

problems in 2017, and essentially collapsed in the middle of that year.  Westinghouse (the lead 

contractor on the project) declared bankruptcy, and SCANA determined that it would take several 

more years and require substantial additional funding to complete construction of the new nuclear 

units.  In July 2017, SCANA announced that it was abandoning the project, with construction of 

the new nuclear units not even being half complete. 

18. The failed nuclear expansion project at V.C. Summer had devastating consequences 

for SCANA’s investors and customers.  Investors lost hundreds of millions of dollars when the 

truth was revealed.  SCANA’s energy customers lost over $1 billion in higher rates that SCANA, 

which was a regulated monopoly, had been allowed to charge them to help recoup the significant 

financing costs associated with the nuclear expansion project. 

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19. At least some executives at SCANA recognized the enormity of the fraud and the 

consequences that would follow.  A SCANA executive wrote to a colleague that the failed 

expansion project at V.C. Summer was due to “[e]go and un-attentiveness,” and that the fallout 

was “[g]onna be a blood letting the likes of which we have never seen.”  The SCANA executive 

concluded:  We “got on our jet airplanes and flew around the country showing the same damn 

construction pictures from different angles and played our fiddles while the whole mf [sic] was 

going up in flames.” 

20. By engaging in the conduct alleged in this Complaint, Defendants SCANA 

Corporation, Dominion Energy South Carolina, Inc. (f/k/a SCE&G), Marsh, and Byrne 

(collectively “Defendants”) violated and/or aided and abetted violations of Section 17(a) of the 

Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 77q(a)], Section 10(b) of the Securities 

Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78j(b)], and Rule 10b-5 thereunder [17 

C.F.R. § 240.10b-5].  In addition, Defendants SCANA Corporation and Dominion Energy South 

Carolina (f/k/a SCE&G) violated, and Defendant Marsh aided and abetted the violations of, 

Section 13(a) of the Exchange Act [15 U.S.C. § 78j(b)] and Rules 12b-20, 13a-1, 13a-11, and 

13a-13 thereunder [17 C.F.R. §§ 240.12b-20, 240.13a-1, 240.13a-11, and 240.13a-13].  Finally, 

Defendant Marsh violated Rule 13a-14 [17 C.F.R. § 240.13a-14]. 

JURISDICTION AND VENUE 

21. The Commission brings this action pursuant to Sections 20 and 22 of the 

Securities Act [15 U.S.C. §§ 77t and 77v] and Sections 21(d) and 21(e) of the Exchange Act [15 

U.S.C. §§ 78u(d) and 78u(e)] to enjoin Defendants from engaging in the transactions, acts, 

practices, and courses of business alleged in this Complaint, and transactions, acts, practices, and 

courses of business of similar purport and object, for civil penalties, disgorgement plus 

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prejudgment interest, an officer and director bar, and for other equitable relief. 

22. The Court has jurisdiction over this action under Section 22 of the Securities Act [15 

U.S.C. § 77v] and Sections 21(d), 21(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), 

and 78aa]. 

23. Venue is proper in this Court pursuant to Section 22(a) of the Securities Act [15 

U.S.C. § 77v] and Section 27(a) of the Exchange Act [15 U.S.C. § 78a(a)]. 

24. A substantial part of the transactions, acts, practices, and courses of business 

constituting violations of the Securities Act and the Exchange Act occurred within the jurisdiction 

of the United States District Court for the District of South Carolina (Columbia Division), including 

but not limited to fraudulent acts being committed and fraudulent statements being made by 

Defendants in this judicial district.  In addition, Defendants SCANA Corporation and Dominion 

Energy South Carolina, Inc. have their principal places of business in this judicial district, and 

Defendants Marsh and Byrne reside in this judicial district. 

25. Defendants, directly and indirectly, made use of the mails, and the means and 

instrumentalities of interstate commerce in connection with the transactions, acts, practices, and 

courses of business alleged in this Complaint.  Defendants, unless enjoined by this Court, will 

continue to engage in the transactions, acts, practices, and courses of business alleged herein, and 

in transactions, acts, practices, and courses of business of similar purport and object. 

DEFENDANTS 

26. SCANA Corporation is a South Carolina corporation engaged, through 

subsidiaries, in electric and natural gas utility operations and other energy-related businesses.  

SCANA Corporation’s principal place of business is located in Cayce, South Carolina.  At all 

relevant times, SCANA Corporation’s securities were registered under Section 12(b) of the 

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Exchange Act, it was a reporting company subject to the provisions of Section 13(a) of the 

Exchange Act, and its stock was traded on the New York Stock Exchange (“NYSE”) under the 

ticker symbol “SCG.”  In addition, SCANA Corporation was a regulated monopoly in South 

Carolina.  In January 2019, SCANA Corporation was acquired by Dominion Energy, Inc. 

(“Dominion”), with SCANA Corporation continuing as a surviving corporation and a wholly 

owned subsidiary of Dominion.  

27. Dominion Energy South Carolina, Inc. (f/k/a/ South Carolina Electric & Gas 

Company) (“SCE&G”) is a wholly owned SCANA subsidiary and regulated public utility 

engaged in the generation, transmission, distribution, and sale of electricity primarily in South 

Carolina.  SCE&G’s securities were registered under Section 12(g) of the Exchange Act during 

the relevant time period and it filed with the Commission combined annual and quarterly reports 

with SCANA Corporation.  After the merger, SCE&G’s name was changed to Dominion Energy 

South Carolina, Inc., but it remains a wholly owned subsidiary of SCANA Corporation operating 

as a public utility.  Dominion Energy South Carolina, Inc. will be referred to as SCE&G in this 

Complaint.  The company’s principal place of business is located in Cayce, South Carolina.  Its 

securities are registered under Section 12(g) of the Exchange Act and it files independent 

periodic reports with the Commission pursuant to Section 13(a) of the Exchange Act.  In this 

Complaint, “SCANA” refers to SCANA Corporation and SCE&G collectively. 

28. Kevin B. Marsh, age 64, is a resident of Irmo, South Carolina.  He received a 

B.B.A. degree in Accounting from the University of Georgia.  Marsh joined SCANA in 1984 

and, over the next 27 years, held various officer positions, including Chief Financial Officer and 

Chief Operating Officer.  From December 2011 until December 2017, Marsh served as the Chief 

Executive Officer of SCANA Corporation and SCE&G and Chairman of the SCANA 

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Corporation and SCE&G Board of Directors.  As the CEO of SCANA, Marsh’s responsibilities 

included overseeing the nuclear expansion project at V.C. Summer, and he was personally 

involved in the project.  Marsh received substantial compensation while working at SCANA, 

including millions of dollars in bonuses during the relevant time period.  Marsh’s compensation 

and bonuses were tied, at least in part, to his oversight of the expansion project at V.C. Summer. 

29. Stephen A. Byrne, age 59, is a resident of Isle of Palms, South Carolina.  Byrne 

received a B.S. degree in Chemical Engineering from Wayne State University.  He joined 

SCE&G in 1995 as the Plant Manager at the V.C. Summer plant, and he later became the 

company’s Chief Nuclear Officer.  From 2012 until January 2018, Byrne was an Executive Vice 

President of SCANA and President of Generation and Transmissions and Chief Operating 

Officer of SCE&G.  His responsibilities included overseeing all nuclear operations for SCANA, 

including construction of the two new nuclear units at V.C. Summer.  Byrne received substantial 

compensation while working at SCANA, including millions of dollars in bonuses during the 

relevant time period.  Byrne’s compensation and bonuses were tied, at least in part, to his oversight 

of the expansion project at V.C. Summer.  Byrne reported to Marsh. 

OTHER RELEVANT ENTITIES 

30. Dominion Energy, Inc., is a Virginia corporation and one of the nation’s largest 

producers and transporters of energy.  Dominion’s securities are registered with the Commission 

under Section 12(b) of the Exchange Act and its stock trades on the NYSE under the ticker 

symbol “D.”  As of February 2020, Dominion’s market capitalization exceeded $70 billion. 

31. The South Carolina Public Service Commission is a publicly elected executive 

board that regulates utility rates in South Carolina.  The PSC regulated the rates that SCANA 

charged its approximately 700,000 electricity customers in the state and also regulated the fixed 

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assets that were invested in SCANA’s business so that utility service could be provided to the 

company’s customers.  During the relevant time period, the PSC held public hearings on 

SCANA’s rate petitions and also maintained a website where many of the false and misleading 

statements made to the regulatory body were accessible by the public. 

32. Office of Regulatory Staff (“ORS”), is South Carolina’s public utility oversight 

agency that had the dual mission of representing the public interest of South Carolina in utility 

regulation and at the same time advancing the interests of utilities in the state.  ORS periodically 

reported to the PSC on the V.C. Summer expansion project. 

33. South Carolina Public Service Authority (a/k/a Santee Cooper) is a state-owned 

public utility that provides electricity to customers in South Carolina.  Santee Cooper’s principal 

place of business is Moncks Corner, South Carolina. 

FACTS 

SCANA’s Nuclear Expansion Project at V.C. Summer 
 
34. In 2005, SCANA concluded that to meet the future energy demands of its 

customers the company needed to increase its base load generation capacity – i.e., it would need 

to generate more power.  SCANA sought proposals from various nuclear generation construction 

firms on the best way to meet the energy needs of its customers over the coming decades. 

35. After considering various proposals, in May 2008, SCANA and Santee Cooper 

agreed to build two new 1,117-megawatt AP1000 Advanced Passive Safety Power Plants as part 

of an expansion of the V.C. Summer Nuclear Station located in Jenkinsville, South Carolina. 

36. SCANA and Santee Cooper split ownership of the expansion project, with 

SCANA taking a 55% ownership stake and Santee Cooper taking the remaining 45% share.  

SCANA’s majority ownership stake allowed it to control the daily operations and management 

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of the expansion project at V.C. Summer. 

37. SCANA already had an existing nuclear unit in operation at V.C. Summer known 

as Unit 1.  The two new nuclear units were known as Unit 2 and Unit 3. 

38. SCANA selected Westinghouse Electric Company to be the lead contractor on the 

project.  On May 23, 2008, SCANA signed an Engineering, Procurement, and Construction 

agreement with Westinghouse (“EPC Agreement”).  In this Complaint, “Westinghouse” refers to 

Westinghouse Electric Company and the other companies working with it on the expansion 

project. 

39. Westinghouse agreed to design, engineer, and construct the new nuclear units.  

The EPC Agreement provided that Unit 2 would be completed by April 1, 2016, and Unit 3 

would be completed by January 1, 2019.  The new units had a life expectancy of sixty years. 

40. The total cost for the nuclear expansion project at V.C. Summer was originally 

estimated at $9.8 billion.  SCANA’s share of the cost (55%) was approximately $5.4 billion and 

Santee Cooper’s share of the cost (45%) was approximately $4.4 billion. 

41. The nuclear expansion project at V.C. Summer was the largest capital project 

undertaken in SCANA’s history. 

42. At the time, SCANA had approximately $12 billion in assets, $4.2 billion in 

annual revenues, and a market capitalization of around $4.5 billion. 

43. SCANA was unable to finance directly the enormous costs of the nuclear 

expansion project.  Instead, SCANA relied on a South Carolina law called the Base Load Review 

Act (“BLRA”) to help offset the costs of the project. 

44. The BLRA enabled SCANA to apply to the PSC (its regulator) for permission to 

raise rates on its customers to recoup the cost of capital associated with construction of the new 

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units.  SCANA was able to charge its customers over $1 billion in higher rates over the course of 

the project.  SCANA’s customers had to pay the higher rates because SCANA is a monopoly. 

45. The BLRA provided, however, that SCANA could be held responsible for any 

costs that were incurred “imprudently.”  Specifically, if the PSC determined that SCANA had 

not prudently managed the nuclear expansion project, the PSC could disallow the recovery of 

increased rates from the company’s customers. 

46. The BLRA also required SCANA to submit detailed information to the PSC to 

justify any additional rate increases on its customers.  Among other information, the BLRA 

required SCANA to file quarterly reports that detailed the progress of construction on the new 

nuclear units, the costs of the project, and the scheduled completion dates for the new units.  

SCANA regularly published the BLRA Quarterly Reports on its website. 

47. In addition to the PSC, the ORS also regulated SCANA.  The ORS is empowered 

to audit, inspect, and examine public utilities within the state, including SCANA. 

48. The ORS’s audit function included both financial matters and construction 

progress related to the expansion project at V.C. Summer.  In particular, under the BLRA, the 

ORS was charged with conducting ongoing monitoring of the construction of the new nuclear 

units and the expenditure of capital on the project. 

49. On May 30, 2008, SCANA submitted a petition to the PSC under the BLRA.  

SCANA requested that the PSC approve a Base Load Review Order to construct and operate the 

two new units at V.C. Summer.  Byrne submitted testimony in support of SCANA’s petition. 

50. In approving SCANA’s petition, the PSC noted that the “definitive substantial 

completion deadlines for Unit 2 and 3 [were] April 1, 2016 and January 1, 2019.” 

51. The PSC also noted that “[o]ne important consideration concerning the 

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reasonableness and prudence of the construction plan is how [SCANA] intends to oversee that 

construction to protect its interests and the interests of its customers.”  In its approval order, the 

PSC specifically referenced Byrne’s testimony that SCANA would provide comprehensive 

oversight of the expansion project.  The PSC also made clear that, given the enormous costs of 

constructing Unit 2 and Unit 3, it was imperative that SCANA prudently manage the project. 

52. The costs of constructing the new nuclear units were not covered by the BLRA.  

To help pay for the construction of Unit 2 and Unit 3, SCANA sold $1 billion in first mortgage 

bonds ($500 million in May of 2015 and another $500 million in June of 2016). 

Federal Production Tax Credits 

53. In enacting the Energy Policy Act of 2005, Congress established production tax 

credits to incentivize the construction of new nuclear facilities in the United States.  The tax 

credits were limited to the first 6000 megawatts of new nuclear capacity, and were structured to 

offset the high costs of starting a new nuclear facility over the first eight years of operation. 

54. To qualify for the production tax credits, newly constructed nuclear units had to 

be producing power by January 1, 2021. 

55. As a result of the Energy Policy Act, SCANA would qualify for production tax 

credits estimated at $85,937,500 annually per unit, or $1.4 billion in total, over 8 years.  SCANA 

would only receive these production tax credits, however, if Unit 2 and Unit 3 were completed 

by January 1, 2021.  SCANA would not qualify for the federal production tax credits if the new 

units were not completed by January 1, 2021. 

56. SCANA’s receipt of the production tax credits for both Unit 2 and Unit 3 was a 

core component of SCANA’s strategic vision and business model.  SCANA touted the 

importance of receiving the production tax credits to maintaining regulatory and financial 

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support for the nuclear expansion project.  In fact, SCANA described the receipt of production 

tax credits as a “strategic imperative” for the company.  At all relevant times, SCANA’s ability 

to receive the production tax credits was important to investors as well as other members of the 

financial community because the funds would mitigate the costs that rate payers would bear for 

the project and, in turn, SCANA would maintain a supportive regulatory environment that 

allowed it to raise rates.  SCANA’s receipt of the tax credits was also important to the PSC, 

which directed SCANA to complete Unit 2 and Unit 3 in time to receive the federal tax credits. 

57. SCANA and its senior executives, including Marsh and Byrne, knew the 

importance of the company qualifying for and receiving the federal production tax credits to the 

viability of the nuclear expansion project at V.C. Summer. 

The Expansion Project Experiences Significant Delays and Cost Overruns  
 
58. Construction on the new nuclear units began in March 2013. 

59. As early as September 2013, it was apparent that the V.C. Summer expansion 

project was already delayed significantly.  By that time, SCANA had submitted several update 

petitions to the PSC to modify the original construction schedules and the completion dates for 

Unit 2 and Unit 3.  SCANA requested that the PSC approve a revised schedule in which Unit 2 

would be completed by March 15, 2017, and Unit 3 would be completed by May 15, 2018. 

60. The construction delays on the project continued throughout 2014.  By August 

2014, Westinghouse had produced a new Revised, Fully Integrated Construction Schedule for the 

project.  The new schedule had preliminary completion dates of late 2018 or the first half of 2019 

for Unit 2.  Westinghouse indicated that it would complete Unit 3 twelve months later (i.e., by late 

2019 or the first half of 2020). 

61. SCANA’s senior management, including Marsh and Byrne, knew about these 

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scheduling delays and Westinghouse’s revised completion dates for Unit 2 and Unit 3. 

SCANA’s Senior Management’s Concerns That Westinghouse 
Would Not Complete the New Nuclear Units by the Revised Dates 
 
62. In light of the significant problems plaguing the project, SCANA and Santee 

Cooper began contemplating an independent third-party assessment of the project.  On August 7, 

2014, SCANA executives, including Marsh and Byrne, along with representatives from Santee 

Cooper met with representatives from Westinghouse to discuss the scheduling delays.  At the 

meeting, Byrne told Westinghouse that SCANA and Santee Cooper wanted an independent review 

of the revised schedule performed because they questioned whether Westinghouse could complete 

the new nuclear units by the revised dates. 

63. After further discussion, Westinghouse acknowledged that it would not meet the 

2018 completion date for Unit 2.  Westinghouse claimed, however, that it could complete Unit 2 

by June 2019 and Unit 3 by June 2020. 

64. SCANA’s senior management, including Marsh and Byrne, doubted 

Westinghouse’s representations regarding the construction schedule and the reliability of that 

schedule.  As Marsh noted in an earlier letter to Westinghouse:  “You have made promise after 

promise, but fulfilled few of them.” 

65. On December 10, 2014, Marsh and Byrne met with representatives from 

Westinghouse.  According to Byrne’s notes from the meeting, Byrne told the representatives from 

Westinghouse that he did not have confidence in their schedule for completing Unit 2 and Unit 3 

based on the history of delays on the project. 

66. On January 6, 2015, SCANA convened an internal meeting to discuss how to move 

forward with Westinghouse on the project in light of the substantial delays in construction on Unit 

2 and Unit 3.  Byrne attended the meeting and his notes reflect that Westinghouse was “not 

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meeting critical milestones to achieve June 2019” completion for Unit 2. 

67. Byrne was correct that Westinghouse was not meeting critical milestones on the 

project.  In fact, Westinghouse was chronically underperforming on constructing Unit 2 and Unit 3.  

SCANA’s senior management, including Marsh and Byrne, knew that Westinghouse failed month 

after month to meet various performance metrics that measure the site’s efficiency and progress 

and indicated whether the project could (or would) be completed under the established schedule. 

68. The main metric for showing whether the project would be completed in 

accordance with the schedule and in time for SCANA to receive the production tax credits was the 

“overall construction complete” and the “monthly percent complete.”  This number was generated 

by taking how much construction work had been completed on the project and then dividing the 

remaining balance of work to be done by the number of months outstanding prior to the 

scheduled completion date (or the production tax credit deadline of January 1, 2021). 

69. The main metric for measuring construction site efficiency was the performance 

factor, which is a ratio of actual time versus the planned amount of time labor spends doing a 

particular task.  A higher performance factor equates to less efficient labor.  For instance, a 

performance factor of 1.0 means that it took as many labor hours to complete a task as was 

planned.  A performance factor of 2.0 means that it took twice as many labor hours as were 

planned to complete a task. 

70. The revised schedule assumed that Westinghouse would achieve a performance 

factor of 1.15, even though Westinghouse had never achieved an efficiency level that low during 

the years that it had been working on the project. 

71. On January 7, 2015, SCANA executives, including Byrne, met again with 

representatives from Westinghouse.  According to Byrne’s notes from the meeting, a 

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Westinghouse representative opened the meeting by stating that June 2019 and June 2020 were 

the most “realistic” completion dates for Unit 2 and Unit 3.  A Westinghouse representative then 

asked whether SCANA believed the revised schedule for the new nuclear units was realistic.  

Byrne’s own notes reflect that he answered, “No.” 

72. On February 16, 2015, SCANA’s senior executives, including Marsh and Byrne, 

met with representatives from Santee Cooper to discuss retaining an independent company to 

perform a third-party assessment of the project. 

73. By March 2015, the expansion project at V.C. Summer was even further behind 

schedule.  For the last six months of 2014, the overall performance factor was around 1.8, and in 

January 2015 it was 1.5.  By February 2015, the performance factor had increased to 2.37 – 

meaning that it was taking more than twice as many labor hours to complete a task as planned. 

74. The overall construction complete percentages were equally dismal, showing that 

only about 15% of the project was completed at that time and at the current rate of progress only 

about 30% of the project would be completed by July 2019. 

75. On March 6, 2015, SCANA and Santee Cooper executives attended a meeting 

regarding the lack of progress on completing construction of Unit 2 and Unit 3.  At the meeting, 

they discussed the overall construction complete percentage and the performance factor, both of 

which showed that Westinghouse’s revised schedule was not credible or achievable. 

 SCANA’s March 12, 2015 Petition to the PSC 
 

76. SCANA filed a petition with the PSC on March 12, 2015, asking it to approve yet 

another revised schedule that had Unit 2 being completed by June 19, 2019, and Unit 3 being 

completed by June 16, 2020.  SCANA’s senior executives knew that this revised schedule was 

not reliable.  SCANA’s petition also anticipated increased costs of nearly $700 million. 

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77. SCANA’s petition falsely stated that “substantial progress has been made towards 

completion of the Units.”  In terms of the tax credits, SCANA falsely wrote that:  “Based on the 

current construction schedules and assuming current tax law, [SCANA] anticipates that 

additional Federal Production Tax Credits will be available for the Units that will provide 

customers with $1.2 billion in additional benefits compared to projections made in 2008.” 

78. In its petition, SCANA also falsely stated that “the Revised, Fully Integrated 

Construction Schedule and Revised Cash Flow Forecast presented here are based upon [its] most 

current review and analysis of the information provided.”  In fact, SCANA’s nuclear team, 

including Byrne and Marsh, knew that the revised schedule was not reliable. 

79. SCANA also emphasized that the company “has been able to obtain low-cost 

borrowing for project costs based on [its] favorable bond ratings and the low cost of financing 

available in debt markets” and that “customers are anticipated to save $1.2 billion in interest 

costs over the life of the debt[.]” 

80. SCANA’s statements to the PSC, including its petitions, were made publicly 

available shortly after they were filed.  Investors viewed a supportive regulatory environment in 

South Carolina as important to maintaining SCANA’s stock price and credit rating because a loss 

of support from the PSC would lead to elevated interest rates for SCANA’s bonds and a drop in 

equity prices for SCANA. 

81. In addition, on March 12, 2015, SCANA filed a Form 8-K with the SEC 

announcing that it had submitted the petition with the PSC and attached a copy of the petition.  On 

the same day, SCANA published a press release that referred to the update petition and then 

misleadingly stated:  “The construction schedule reflected in the petition, without consideration of 

all mitigating strategies, indicates a substantial completion date for Unit 2 of June 2019 and a 

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substantial completion date for Unit 3 of June 2020.”  Marsh also misleadingly claimed that 

“[s]ubstantial progress has been made towards the completion of the units” and that SCANA 

“expect[s] more production tax credits” than the company initially thought it would receive. 

82. On March 30, 2015, SCANA’s senior executives, including Marsh and Byrne, 

attended an internal Risk Management Committee meeting where it was decided that there was an 

“increased risk” that the company would not qualify for the federal tax credits because the new 

nuclear units might not be completed by January 1, 2021.  SCANA and its senior executives did 

not disclose that information to the PSC or to investors. 

83. Instead, in SCANA’s BLRA Quarterly Report for the quarter ending March 31, 

2015, SCANA misleadingly touted that the “Revised, Fully-Integrated Construction Schedule 

provides a new substantial completion date for Unit 2 of June 19, 2019, and a new substantial 

completion date for Unit 3 of June 16, 2020.”  SCANA also falsely claimed that the company 

would “monitor closely . . . the cost and schedule for the project” and “will continue to update the 

[PSC] and the ORS of progress and concerns as the project proceeds.”  SCANA’s BLRA Quarterly 

Report was made publicly available on its website shortly after it was filed. 

 Defendants Make False Statements and Omit Material Information 
 in SCANA’S First Quarter Earnings Call and Form 10-Q Filing 
 

84. On April 6, 2015, Byrne received an e-mail from Santee Cooper’s Senior Vice 

President for Nuclear Energy regarding the schedule delays and cost overruns on the expansion 

project.  The e-mail reiterated what had been discussed at the March 6 meeting and included 

several charts as attachments that visually depicted the lack of progress on the project. 

85. The e-mail noted that, in terms of cost, the attachments did not include a “total cost 

curve” chart because, based on the “actual numbers recorded on the project over the 5 month 

period (Sept 2014 – Jan 2015),” such a curve “would be off the chart.” 

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86. In terms of schedule, one of the charts made clear that the new units were nowhere 

close to being completed.  The chart showed that only around 15% of the project had been 

completed and that at the current rate of progress only 30% would be completed by July 2019. 

87. Specifically, Byrne received the following chart entitled, “Percent Complete – 

Direct Craft Work.”  The chart showed the percent of direct craft work (i.e., skilled labor) that 

would be completed at the current rate of progress and the improvement that would be necessary to 

achieve the proposed June 2019 and June 2020 substantial completion dates (“SCDs”) that 

SCANA had represented to the PSC.  The chart reflected that the new units would not be finished 

by the dates that SCANA had publicly touted: 

   

88. On April 21, 2015, Marsh attended a meeting with Santee Cooper.  Marsh’s notes 

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from the meeting state that the “current pace won’t achieve 2020.”  Marsh was referring to the fact 

that at the current rate of progress construction of the new units would not be completed in time for 

SCANA to qualify for the federal production tax credits. 

89. In April 2015, Byrne was also involved in the preparation of a memorandum for an 

upcoming meeting between the CEOs of SCANA and Santee Cooper. 

90. On April 28, 2015, Byrne received an e-mail from his nuclear team in preparation 

for that meeting which included a “CEO Talking Points” memorandum as an attachment.  The 

CEO Talking Points memorandum listed numerous “schedule concerns” that SCANA and Santee 

Cooper had regarding the nuclear expansion project. 

91. Specifically, the memorandum stated: 

• Westinghouse “has no credibility for developing a realistic schedule”; 

• Westinghouse “continues to fail on executing critical work path”; 

• “The cumulative direct craft productivity factor (PF) has gotten worse every 

month for the past two years”; 

• “In the last 2 years, less than 8% of direct work has been completed”; 

• “And despite the negative trend in craft productivity, in the next 4-1/2 years, 

84% will need to be completed to meet the Jun 2019/June 2020 SCDs”; 

• SCANA and Santee Cooper have “no confidence in [Westinghouse’s] ability 

to complete Unit 3 by the end of 2020 and suspect[] that production tax 

credits are in jeopardy for that unit”; and 

• “The continued failure to meet schedule (Unit 2 now at least 39 months late, 

and Unit 3 at least 18 months late . . . ) has severely impacted credibility and 

has placed ongoing regulatory and financial support in jeopardy.” 

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92. The memorandum further stated that Westinghouse “has no credibility for 

developing a realistic cost estimate.” 

93. In conclusion, the memorandum stated that “Production Tax Credits are at risk”; 

“Financing Costs are at risk for increasing”; and “BLRA rate recovery is at risk.”  

94. When asked by a SCANA executive how these conclusions could be reconciled 

with SCANA’s recent petition to the PSC, a member of SCANA’s new nuclear team responded:  

“Respectfully, there is no way to comment on these talking points and remain consistent with the 

recent PSC filing.  This is more like a tale of two projects.” 

95. On April 30, 2015, SCANA held its first quarter earnings call and webcast.  Byrne 

had received the “CEO Talking Points” memorandum just two days earlier. 

96. On the call, Byrne misleadingly stated that “[t]he construction schedule, without 

consideration of all mitigating strategies, includes a substantial completion date of June of 2019 for 

Unit 2 and June of 2020 for Unit 3.”  At the time that Byrne made this statement, he knew that the 

construction schedule was unreliable and that neither Unit 2 nor Unit 3 would be completed by 

those dates at the current rate of progress. 

97. An analyst then asked Byrne, “what you might think might happen with nuclear 

PTCs.  I know you’re coming up against the time clock . . . .” 

98. Byrne falsely responded:  “We believe that, and I think it was outlined in our 

filings, that we will actually be qualifying for more production tax credits tha[n] we had 

originally anticipated in our original filing.  So that’s a positive aspect.  And we will – we 

fully anticipate that [Westinghouse] will be able to bring the plants in by June of 2019 and 

June of 2020 for the second unit.  So the production tax credits, and you qualify for them by 

having the plant in service by the end of 2020.  So while I am not satisfied with only having 

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about six months’ margin, we do believe there are some opportunities, particularly on that 

trailing unit, or Unit 3, for us to bring that in a little bit earlier.”  [Emphasis added]. 

99. Byrne’s statements in response to the analyst’s question regarding the schedule and 

the production tax credits were false and misleading.  He knew that Westinghouse’s schedule was 

not reliable and that SCANA likely would not qualify for some, or perhaps any, of the tax credits. 

100. In conjunction with the earnings call, SCANA prepared and released a PowerPoint 

presentation.  Byrne’s name is listed on the first page and he referred to the PowerPoint 

presentation on the earnings call. 

101. The presentation references SCANA’s March 2015 petition to the PSC, and falsely 

states that the “New In Service Dates” for Unit 2 is “June 19, 2019” and for Unit 3 is “June 16, 

2020.” 

102. SCANA posted the transcript from the earnings call and the PowerPoint 

presentation on its website.  In addition, investors were allowed to listen to the earnings call. 

103. On May 8, 2015, SCANA filed a Form 10-Q with the SEC. 

104. SCANA’s Form 10-Q stated that the nuclear production tax credits “could total as 

much as approximately $1.4 billion.”  SCANA failed to disclose that its new nuclear team, 

including Byrne and Marsh, knew that Westinghouse would not complete Unit 2 or Unit 3 in 

accordance with the revised schedule. 

105. SCANA’s Form 10-Q further stated, falsely, that “Based on the above substantial 

completion dates provided by [Westinghouse] of June 2019 and June 2020 for Units 2 and 3, 

respectively, both New Units are expected to be operational and to qualify for the nuclear 

production tax credits; however, further delays in the schedule or changes in tax law could 

impact such conclusions.”  At this time, SCANA and its senior management, including Marsh 

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and Byrne, knew that based on the current rate of progress the new nuclear units were not likely 

to be completed in time to qualify for the production tax credits.  SCANA and its senior 

management, including Marsh and Byrne, also knew that there would be substantial additional 

delays and that the revised schedule was not reliable. 

106. SCANA’s Form 10-Q omitted the true status of the nuclear expansion project, 

including the unreliability of the schedule and the serious doubts about the new units qualifying for 

the production tax credits. 

107. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the 

Sarbanes-Oxley Act, Marsh certified that he had reviewed the periodic filing and that it contained 

no untrue statements.  Marsh knew that his certification was false and misleading. 

108. Similarly, Byrne knew that the information in SCANA’s periodic filing was false 

and misleading.  Nevertheless, on May 8, 2015, Byrne signed a sub-certification letter in 

connection with the filing that falsely stated he had “no knowledge of any fraud or suspected fraud 

affecting SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form 

10-Q. 

 SCANA Issues $500 Million in First Mortgage Bonds in May 2015 

109. As a result of the BLRA and the increased rates approved by the PSC, SCANA was 

receiving substantial payments from ratepayers in South Carolina to help finance the nuclear 

expansion project. 

110. By 2015, however, SCANA’s capital expenditures on the project were estimated at 

over $1 billion annually.  The company needed additional funds to continue the project. 

111. On October 15, 2012, SCANA filed with the SEC an Automatic Shelf Registration 

statement on Form S-3ASR to register the sale of first mortgage bonds.  The Form S-3ASR 

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registration statement incorporated by reference certain prior filings and all subsequently filed 

periodic reports filed by SCANA, including the periodic reports discussed in this Complaint.  

Marsh signed the Form S-3ASR. 

112. On or about May 19, 2015, SCANA issued $500 million in First Mortgage Bonds.  

The First Mortgage Bonds matured in June 2065 and had an interest rate of 5.10%.  Marsh and 

Byrne knew about the bond offering and the representations incorporated into the registration 

statement. 

113. SCANA’s preliminary prospectus supplement for the First Mortgage Bonds 

incorporated by reference the company’s recent Form 10-Q and its updated petition with the PSC.  

Those documents were materially misleading regarding the construction schedule and the 

likelihood that SCANA would qualify for the production tax credits. 

114. In addition, the preliminary prospectus supplement failed to disclose that SCANA 

and its senior executives, including Marsh and Byrne, knew that the construction schedule within 

the preliminary prospectus was unrealistic. 

115. SCANA’s bonds were given an “A-” rating by Fitch Ratings, Inc. (“Fitch”).  As 

one of its “key rating drivers,” Fitch noted that “under the current schedule the substantial 

completion date of Unit 2 is June 2019 with the substantial completion of Unit 3 expected 12-

months later.”  Fitch further noted that the PSC’s “approval of the [March 2015 petition] is 

critical to maintaining existing ratings” and that SCANA’s “ability to fully recover future 

construction costs will be dependent on the PSC’s assessment of its March 2015 petition.” 

116. Fitch made clear that its A- bond rating rested on the “key assumption” that the 

PSC would approve SCANA’s update petition.  Fitch also opined that “[w]hile not expected, any 

change in the BLRA process that affects the timeliness and amount of nuclear cost recovery 

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would adversely affect current ratings.” 

117. SCANA ultimately sold the $500 million in First Mortgage Bonds. 

118. The funds raised by SCANA were used primarily for the nuclear expansion project 

at V.C. Summer. 

119. At this time, SCANA had a market capitalization of around $7.5 billion. 

Defendants Make False and Misleading Statements In Support of the PSC Petition 

120. On May 26, 2015, SCANA submitted written testimony from its senior executives 

to the PSC in support of the update petition.  This testimony was publicly available shortly after it 

was filed and could be accessed from the PSC’s website. 

121. In his written testimony, Marsh specifically referenced SCANA’s recent bond 

offering, which had been made just one week earlier.  Marsh testified that selling all of the bonds 

required a “slight nudge upward in the interest rate to bring the book of potential buyers from $400 

million to the expected $500 million.” 

122. Marsh stated that, according to several investment banking firms involved in the 

transaction, “an important factor for many potential buyers was their concern over regulatory risk 

related to the current filing.  Bond buyers have options.  If bond buyers have concerns about 

[SCANA’s] risk profile, it is often just as easy for them to buy bonds of companies that do not face 

such risks as to buy [SCANA’s] bonds.”  Marsh noted that the “market is becoming increasingly 

sensitive to [SCANA’s] regulatory risk in the nuclear context” and that the “risk of losing market 

support for our financing plan is real.” 

123. Marsh also explained that 2015-2017 was a “critical time” for SCANA’s financing 

of the expansion project.  He said that “during this three year period, [SCANA] will not have the 

option of waiting out unfavorable conditions in the capital markets[.]”  Rather, “during this time, it 

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will be vitally important that [SCANA] maintain access to capital markets on favorable terms.” 

124. In addition to talking about the recent bond offering, Marsh also testified about the 

construction schedule, falsely stating:  “The cost and construction schedules presented for 

approval here are no different from those approved in 2008 and in each update docket thereafter.  

In each case, the Company came before the Commission with the best information available 

concerning the anticipated construction schedule for completing the Units and the anticipated 

costs associated with that schedule.” 

125. Marsh also falsely testified:  “In every case, both the cost and construction 

schedules presented and approved have been anticipated schedules for completing the Units . . . 

The current schedules [submitted in this update petition] reflect the best information available 

about the anticipated costs and construction timetables for completing the project . . . [SCANA] 

has ‘approved’ these updated schedules in the sense that it recognizes them to be the most 

accurate and dependable statements available of the anticipated construction schedule for 

completing the Units and the anticipated schedule of capital costs for completing the Units . . . 

[SCANA] has carefully reviewed the data provided by [Westinghouse] and verified its 

reasonableness.” 

126. Marsh also testified falsely about SCANA’s receipt of production tax credits:  “In 

2008, [SCANA] anticipated its total benefit would be $1.06 billion gross of tax.  Now it appears 

that there will be a smaller number of competing utilities so that [SCANA] will receive a larger 

amount of credits.  Assuming that the current completion dates can be maintained, [SCANA’s] 

forecasted benefit has increased by approximately $1.2 billion in future dollars since 2008.” 

127. Byrne also provided false written testimony to the PSC regarding the status of the 

nuclear expansion project and the reliability of the construction schedule. 

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128. Byrne falsely testified:  SCANA “determined in March 2015 that the cost and 

construction schedules as updated by [Westinghouse] through that time were in fact the anticipated 

schedules for completion of the project as envisioned by the BLRA.”  Byrne went on to say, 

falsely, that the schedules “are reasonable and prudent schedules for completing the project [and] 

[t]hey should be approved.” 

129. Byrne concluded by falsely stating:  “I can affirm that these schedules represent 

the best and most definitive forecast of the anticipated costs and construction schedule required 

to complete this project that is available as of the date of this filing of the testimony.  These 

updated costs are not in any way the result of imprudent management of the project by” SCANA. 

130. In reality, the current schedule before the PSC did not reflect the “best” or “most 

definitive” information available.  To the contrary, SCANA and its senior management knew that 

the revised schedule was unreliable and that, at the current rate of progress, the new nuclear units 

would not be completed in time to receive the production tax credits.  SCANA and its senior 

management also failed to disclose to the PSC that they and Santee Cooper had decided to have an 

independent third-party assessment performed in light of the schedule delays to date and the 

unreliability of what Westinghouse, the lead contractor, was telling them. 

131. In June 2015, SCANA’s and Santee Cooper’s nuclear teams prepared another 

“CEO Meeting Talking Points” memorandum for an upcoming meeting with Westinghouse. 

132. The memorandum stated that:  “Completion of the [Westinghouse] AP1000 design 

has been a significant project challenge affecting procurement and construction.  The incomplete 

design of the AP1000 has resulted in 3–4 years of inefficient (and very poor) site execution.  As a 

result, [Westinghouse] has not been able to achieve success on any schedule or cost estimate to 

date.  These issues have created a significant question of [Westinghouse’s] credibility 

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regarding the delivery of the project.”  [Emphasis added]. 

133. The memorandum further noted that the continued failure to meet milestones has 

placed the “regulatory and financial support in jeopardy” and, for SCANA, put the “production tax 

credits in jeopardy.”  In short, SCANA and Santee Cooper had “little confidence in 

[Westinghouse’s] ability to complete Unit 3 by the end of 2020.”  [Emphasis added]. 

134. In terms of cost, the memorandum noted that Westinghouse “has little credibility 

for developing a realistic cost estimate.” 

135. On June 5, 2015, representatives from SCANA’s nuclear team and Santee Cooper 

met with representatives from Westinghouse to discuss the status of the project.  SCANA and 

Santee Cooper notified Westinghouse that they planned to have an independent third party evaluate 

the project. 

136. Marsh and Byrne knew of the planned third-party assessment, the reasons for 

requesting it, and that it was discussed with Westinghouse.  In fact, they were both sent notes from 

the meeting.  Neither Marsh nor Byrne, however, publicly disclosed the planned third-party 

assessment or that SCANA’s nuclear team had concluded that Westinghouse’s schedule was not 

reliable. 

137. Instead, SCANA filed a BLRA Quarterly Report for the period ending June 30, 

2015, that touted the same unreliable construction schedule and made the same false and 

misleading statements regarding SCANA’s oversight of the project and its candor with the PSC 

and the ORS as its earlier report. 

138. On July 21, 2015, the PSC held a public hearing on SCANA’s update petition. 

139. Marsh testified that his pre-filed written testimony, with three minor exceptions, 

had not changed.  Marsh went on to testify that he was “directly involved in the management and 

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oversight of the new nuclear project” and he reiterated that “the projected benefit for federal 

production tax credits . . . has increased by approximately $1.2 billion.” 

140. In terms of the schedule, Marsh falsely testified:  “The schedule we have put before 

the Commission is a schedule we are working to, on site, now, to complete the units.  So we have 

agreed this is the working schedule to complete the units, as we presented to the Commission. . . . 

There is no dispute that this is the schedule upon which the plants are being built.”  Marsh failed to 

disclose that he and other SCANA executives knew that the schedule was unreliable and that the 

company would not qualify for the production tax credits at the current rate of progress. 

141. In addition, Marsh testified:  “Nothing is more important to SCE&G’s financial 

plan than maintaining market confidence and the continued application of the BLRA in a fair and 

consistent way.  Loss of this confidence would put the financial plan for completing the units at 

risk.”  Marsh’s testimony was available to the public. 

142. Byrne also testified at the July 21, 2015 PSC hearing.  He testified that his pre-filed 

written testimony had not changed. 

143. Byrne then testified, falsely, that:  “In March of 2015, [SCANA] determined that 

the updated costs and construction schedule from [Westinghouse and its sub-contractor] were, in 

fact, accurate schedules for completion of the project as envisioned by the BLRA. . . The costs and 

construction schedules submitted here are well reviewed, well documented, and reflect reasonable 

and accurate schedules for the project based on information to date.  They are not the result of 

imprudence by [SCANA] in any way.  As with any complex project, however, these schedules are 

likely to change; but based on current information, they are appropriate for approval as the new 

BLRA schedules for this project.”  Byrne’s testimony was available to the public. 

144. In September 2015, the PSC approved SCANA’s update petition.  The PSC relied 

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on testimony from Marsh and Byrne in finding that the new schedule was “a reasonable and 

prudent plan for completing construction of the Units given the information available at this time.” 

145. SCANA issued a press release announcing the PSC’s decision.  In the press release, 

SCANA falsely stated that “[t]he construction schedule approved today, without consideration of 

all mitigating strategies, indicates substantial completion dates of June 2019 and June 2020 for 

Units 2 and 3, respectively.”  SCANA also filed a Form 8-K on September 2, 2015, that included 

the press release as an attachment. 

146. On September 30, 2015, the PSC approved SCANA’s revised rate petition, which 

the company had submitted shortly after issuing the $500 million in First Mortgage Bonds.  

Specifically, the PSC granted SCANA a rate increase of over $64 million in annual retail revenue. 

Defendants Retain Bechtel, Disguise Hiring Bechtel From Regulators, and Then 
Contradict Bechtel’s Findings in Public Filings and Testimony Before the PSC 

  
147. On August 6, 2015, because of the significant delays that had occurred to date, 

SCANA, through its counsel, retained Bechtel Power Corporation to conduct an independent 

assessment of the nuclear expansion project at V.C. Summer.  Bechtel is an internationally 

known engineering, procurement, construction, and project-management company based in 

Virginia.  Bechtel has worked on mega-projects for over 80 years, including construction of the 

Hoover Dam in Nevada. 

148. Bechtel was paid $1 million for its assessment of the expansion project at V.C. 

Summer. 

149. Marsh and Byrne knew that Bechtel had been hired to evaluate the expansion 

project at V.C. Summer because the project was significantly behind schedule. 

150. Bechtel’s field work and analysis took around two months to complete.  Bechtel’s 

work included meeting with Byrne to discuss the expansion project. 

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151. On August 7, 2015, SCANA filed a Form 10-Q with the SEC. 

152. SCANA’s Form 10-Q stated that the nuclear production tax credits “could total as 

much as approximately $1.4 billion.”  SCANA failed to disclose that its new nuclear team, 

including Byrne and Marsh, knew that Westinghouse would not complete Unit 2 or Unit 3 in 

accordance with the revised schedule and that the schedule was unreliable.  Nor did it disclose that 

SCANA had hired a third party to perform an independent assessment of the construction project 

as a result of the significant delays. 

153. SCANA’s Form 10-Q further stated, falsely, that “Based on the above substantial 

completion dates provided by [Westinghouse] of June 2019 and June 2020 for Units 2 and 3, 

respectively, both New Units are expected to be operational and to qualify for the nuclear 

production tax credits; however, further delays in the schedule or changes in tax law could 

impact such conclusions.”  At this time, SCANA and its senior management, including Marsh 

and Byrne, knew that the new nuclear units would not be completed in time to qualify for the 

production tax credits based on the current rate of progress.  SCANA and its senior management, 

including Marsh and Byrne, also knew that there would be substantial additional delays and that 

the revised schedule was not reliable. 

154. SCANA’s Form 10-Q omitted the true status of the nuclear expansion project, 

including the unreliability of the schedule and the fact that SCANA would not qualify for the 

federal tax credits at the current rate of progress. 

155. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the 

Sarbanes-Oxley Act, Marsh certified that he had reviewed the periodic filing and that it contained 

no untrue statements.  Marsh knew that his certification was false and misleading. 

156. Byrne also knew that the information in SCANA’s periodic filing was false and 

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misleading.  Nevertheless, on August 7, 2015, Byrne signed a sub-certification letter in connection 

with the filing that falsely stated he had “no knowledge of any fraud or suspected fraud affecting 

SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form 10-Q. 

157. By October 2015, Bechtel was ready to discuss key observations from its study 

with SCANA and Santee Cooper.  At that time, construction on Unit 2 and Unit 3 was still 

significantly behind schedule and had been falling further behind schedule each month. 

158. As one SCANA nuclear construction manager put it:  “Basically, not a single 

schedule mitigation has worked.”  Another SCANA nuclear finance manager noted that at the 

current rate of progress “it would take 22 years to complete the plants.”  [Emphasis added]. 

159. On October 22, 2015, Bechtel met with senior executives from SCANA to present 

orally its findings.  Marsh and Byrne attended the presentation, which included a PowerPoint 

presentation by Bechtel entitled, “Preliminary Results of Bechtel Assessment.” 

160. Bechtel’s presentation included several highly critical findings regarding the 

project schedule and SCANA’s management of the project. 

161. Bechtel found that SCANA and its executives were not prudently managing the 

project.  Specifically, Bechtel wrote:  “The oversight approach taken by [SCANA and Santee 

Cooper] does not allow for real-time, appropriate cost and schedule mitigation.”  Bechtel further 

noted that SCANA and Santee Cooper “do not have an appropriate project controls team to 

assess/validate [Westinghouse’s] reported progress and performance.” 

162. Bechtel made several recommendations on how SCANA could improve its 

oversight of the project. 

163. In terms of schedule, Bechtel found that “the current schedule is at risk” and that 

“[t]o-go scope quantities, installation rates, productivity, and staffing levels all point to 

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completion later than current forecast.” 

164. Bechtel’s preliminary results indicated that Unit 2, which was currently scheduled 

to be completed by June 2019, would not be completed until between December 2020 and 

August 2021 (i.e., 18 to 26 months later than scheduled). 

165. Bechtel found that Unit 3, which was scheduled to be completed by June 2020, 

would not be completed until between June 2022 and June 2023 (i.e., 24 to 36 months later than 

scheduled). 

166. These revised dates left only a small, one month window for Unit 2 to qualify for 

the production tax credits.  Unit 3 would not be completed in time to qualify for the tax credits. 

167. Significantly, the revised completion dates in Bechtel’s presentation reflected a 

best case scenario for SCANA that assumed implementation of Bechtel’s recommendations and 

significant improvement in the rate of construction. 

168. Bechtel further observed that Westinghouse’s “forecasts for schedule durations, 

productivity, forecasted manpower peaks, and percent complete do not have a firm basis.”  

169. In conclusion, Bechtel found that “the V.C. Summer Units 2 and 3 project suffers 

from various fundamental [engineering, procurement, and construction] and major project 

management issues that must be resolved for project success.” 

170. Marsh’s notes from the meeting include the delayed completion dates for Unit 2 

and Unit 3 that would make the units ineligible for the tax credits under the Energy Policy Act.  

His notes also reflect that the actual monthly progress achieved on the project was a fraction of 

the progress needed to complete the new units in time to qualify for the tax credits. 

171. On October 27, 2015, just five days after Bechtel presented its findings to SCANA, 

SCANA filed a Form 8-K with the Commission and issued a press release announcing an 

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amendment to the existing EPC Agreement (“EPC Amendment”).  Neither the Form 8-K nor the 

press release disclosed the true status of the project. 

172. Instead, despite Bechtel’s finding that the completion of Unit 2 and Unit 3 would be 

delayed by 18 months to 3 years, SCANA announced that the EPC Amendment revised the 

contractual Guaranteed Substantial Completion Dates (“GSCD”) for the new nuclear units by just 

two months – to August 31, 2019 for Unit 2 and August 31, 2020 for Unit 3. 

173. SCANA and its senior executives, including Marsh and Byrne, did not want 

Bechtel’s findings to be made publicly available, and the company went to great lengths to hide 

those findings and the true status of the project from the ORS, PSC, and investors. 

174. SCANA, in publicizing the EPC Amendment, which was also attached to 

SCANA’s Form 10-Q for the third quarter of 2015, did not disclose that the schedule contained in 

the amended agreement was unreliable and unachievable.  SCANA also failed to disclose this 

information in its BLRA Quarterly Report for the period ending September 30, 2015. 

175. In addition to revising the schedule, SCANA stated that the EPC Amendment 

resolved the outstanding disputes between SCANA and Westinghouse, and included a provision 

for liquidated damages in the event that Westinghouse failed to complete the project in time for 

SCANA to qualify for the production tax credits.  The total liquidated damages for SCANA and 

Santee Cooper were capped at $463 million per new unit, however, with SCANA’s portion being 

approximately $255 million per new unit. 

176. Several assumptions regarding construction progress and performance metrics were 

known by SCANA to be necessary to achieve the new completion dates of August 2019 and 

August 2020, including a performance factor of 1.15 and a percent complete of 3% per month.  

SCANA’s senior management, including Marsh and Byrne, knew the importance of these metrics 

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and that Westinghouse was nowhere close to achieving either of them. 

177. Additionally, the EPC Amendment included an option (known as the “fixed price 

option”) whereby SCANA and Santee Cooper could elect to proceed with the project at a set 

price going forward.  If SCANA elected the fixed price option, however, the liquated damages 

would be reduced to $186 million per unit (or $372 million for both units). 

178. Bechtel told Marsh that it was close to issuing a written report outlining their 

findings and recommendations.  Marsh asked Bechtel to hold off on finalizing the report and, 

ultimately, asked that Bechtel send the report to SCANA’s outside counsel. 

179. On November 6, 2015, SCANA filed a Form 10-Q with the SEC. 

180. SCANA’s Form 10-Q stated that the nuclear production tax credits “could total as 

much as approximately $1.4 billion.”  SCANA failed to disclose, however, that its new nuclear 

team, including Byrne and Marsh, knew that Westinghouse would not complete Unit 2 or Unit 3 in 

accordance with the revised schedule and that the company would not qualify for the tax credits at 

the current rate of progress. 

181. SCANA’s Form 10-Q further stated, falsely, that “[b]ased on the guaranteed 

substantial completion dates provided above [August 2019 and August 2020], both New Units 

are expected to be operational and to qualify for the nuclear production tax credits; however, 

further delays in the schedule or changes in tax law could impact such conclusions.”  At this 

time, SCANA and its senior management, including Marsh and Byrne, knew that based on the 

current rate of progress the new nuclear units would not be completed in time to qualify for the 

production tax credits.  SCANA and its senior management, including Marsh and Byrne, also 

knew that there would be substantial additional delays and that the revised schedule was not 

reliable. 

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182. SCANA’s Form 10-Q omitted the true status of the nuclear expansion project, 

including the unreliability of the schedule and that the new units were unlikely to qualify for the 

production tax credits. 

183. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the 

Sarbanes-Oxley Act, Marsh certified that he had reviewed the periodic filing and that it contained 

no untrue statements.  Marsh knew, however, that his certification was false and misleading. 

184. Similarly, Byrne knew that the information in SCANA’s periodic filing was false 

and misleading.  Nevertheless, on November 6, 2015, Byrne signed a sub-certification letter in 

connection with the filing that stated he had “no knowledge of any fraud or suspected fraud 

affecting SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form 

10-Q. 

185. A week later, on or about November 12, 2015, Bechtel detailed its findings in a 

draft Project Assessment Report (the “Draft Bechtel Report”). 

186. The Draft Bechtel Report was highly critical of SCANA’s management of the 

project, concluded that the stated completion dates of June 2019 (Unit 2) and June 2020 (Unit 3) 

were not going to be achieved, and found that Westinghouse’s “plans and schedules are not 

reflective of actual project circumstances.” 

187. The Draft Bechtel Report stated, in short, that “the to-go scope quantities, 

installation rates, productivity, and staffing levels all point to project completion later than the 

current forecast.” 

188. The Draft Bechtel Report concluded that, even if their recommendations were 

adopted, Unit 2 would not be completed until between December 2020 and August 2021 and 

Unit 3 would not be completed until between June 2022 and June 2023.  In other words, neither 

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Unit 2 nor Unit 3 would be completed until at least 18 months to 3 years later than SCANA and 

its executives, including Marsh and Byrne, were telling the PSC and investors.  In addition, 

Bechtel’s assessment meant that SCANA would not qualify for some, and may not qualify for 

any, of the $1.4 billion in federal production tax credits. 

189. On November 12, 2015, outside counsel for SCANA instructed Bechtel that it 

was “extremely important” that Bechtel “hold the final report” until he had reviewed it. 

190. After reviewing the Draft Bechtel Report, SCANA’s outside counsel requested 

that Bechtel remove the schedule projections showing that Unit 2 and Unit 3 would not be 

completed until much later than SCANA and its senior management, including Marsh and 

Byrne, had publicly stated. 

191. SCANA’s outside counsel also requested that Bechtel remove much of the 

unfavorable language regarding SCANA’s management of the project. 

192. Just one week later, on November 19, 2015, SCANA’s senior management, 

including Marsh and Byrne, testified before the PSC in an ex parte hearing to discuss the project 

and the EPC Amendment.  Their testimony was made publicly available shortly after the 

testimony was given. 

193. At the hearing, Marsh testified falsely about SCANA’s ability to complete the 

project in time to qualify for the production tax credits. 

194. Specifically, Marsh testified:  “As you know, those tax credits expire at the end of 

2020.  We have to have our plants on-line at the end of 2020 to qualify for those.  The first plant 

is certainly more than a year ahead of that; the second plant is a little bit less than six months 

ahead of that . . . .” 

195. Marsh went on to say:  “[T]he guaranteed substantial completion dates, those 

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have moved from June of ‘19 and June of 2020 for Units 2 and 3 – under the ‘EPC’ and the 

‘Fixed Price Option’ those have both moved to August of ‘19 and August of 2020.  A couple of 

months’ move there, but still we believe in time to finish the units for the production tax credit 

qualification.” 

196. Byrne also testified falsely at the ex parte hearing before the PSC.  Byrne testified 

that under the ECP Amendment the guaranteed substantial completion dates were now August 

31, 2019 for Unit 2 and August 31, 2020 for Unit 3, even though he knew that those dates were 

not achievable. 

197. Byrne also failed to disclose that both units would not be completed until much 

later and that the schedule was not reliable.  Just one month earlier, Byrne himself had authored a 

document entitled, “No Faith in Schedule Promises.”  In the document, Byrne listed all of the 

completion dates promised by Westinghouse over the life of the project, including the current 

August 2019 and August 2020 dates.  In the document, Byrne also referred to an “independent 

assessment” by Westinghouse that had the completion dates delayed by 13 months beyond the 

August 2019 and August 2020 dates.  Byrne failed to disclose that he had “no faith” in the 

representations being made by Westinghouse regarding the construction schedule when he 

testified before the PSC in November 2015.  

198. Bechtel ultimately acquiesced to the demands of SCANA’s counsel and agreed to 

separate its conclusions regarding the schedule and completion dates into a stand-alone report.  

Bechtel agreed to submit a new report to counsel for SCANA that did not address the 

unreliability of the schedule. 

199. On or around February 5, 2016, Bechtel delivered the final report to SCANA’s 

counsel (“Bechtel’s Final Report”). 

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200. Bechtel’s Final Report was, in essence, a scrubbed version of the Draft Bechtel 

Report.  Bechtel’s Final Report omitted Bechtel’s schedule assessment analysis, the predicted 

actual completion dates for Unit 2 and Unit 3 that extended beyond the production tax credit 

deadline, and language that the current schedule was unreliable. 

201. Bechtel’s Final Report also omitted much of the language regarding SCANA’s 

mismanagement of the project. 

202. SCANA’s counsel delivered Bechtel’s Final Report to officers of Santee Cooper 

and SCANA, including Marsh and Byrne. 

203. SCANA and its senior management, including Marsh and Byrne, contradicted 

Bechtel’s adverse findings regarding the schedule and management of the project in their public 

statements to the ORS, the PSC, and investors.  As Marsh wrote in anticipation of a meeting with 

Santee Cooper to discuss Bechtel’s findings:  “Need to protect document.” 

204. Even when faced with direct questions regarding the retention of consultants, 

SCANA chose to mislead its regulators.  In March 2016, ORS sent SCANA a formal Request for 

Information asking whether it had retained a project consultant for the V.C. Summer expansion 

project.  SCANA responded by identifying two consultants who had been paid $5,000 and 

$25,000, respectively, for services regarding the process of selecting construction payment 

milestones.  SCANA and its senior management failed to disclose Bechtel as a project 

consultant, even though Bechtel had been paid $1 million and had rendered a detailed assessment 

of the construction schedule and SCANA’s oversight of the project. 

Defendants Continue to Make False and Misleading Statements as 
the Nuclear Expansion Project Falls Further Behind Schedule in 2016 

205. In 2016, Westinghouse continued to fall further behind schedule in constructing 

Unit 2 and Unit 3.  SCANA and its senior management knew about these construction delays and 

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the likelihood that SCANA would not qualify for the $1.4 billion in production tax credits. 

206. Others at SCANA knew as well.  On January 4, 2016, a member of SCANA’s 

nuclear team informed Marsh that she “did not want to be involved in any of the SEC reporting 

activities because she was scared of [SCANA’s] disclosures,” according to Marsh’s notes from 

the meeting. 

207. Despite the unreliability of the construction schedule and the likelihood of the 

company failing to qualify for the production tax credits, SCANA continued to publicize 

progress being made on the project, including in press releases and videos posted to the internet.  

These public statements and videos created the false impression that the construction schedule 

was reliable and that the company would qualify for the production tax credits. 

208. For example, on January 19, 2016, SCANA released a video entitled, 

“Highlighting a Year of Progress for V.C. Summer Units 2 and 3.”  In the video, SCANA touted 

progress being made in different areas of the project.  SCANA also issued a press release the 

same day that listed the achievement of several “major milestone[s].” 

209. On January 25, 2016, SCANA’s Risk Management Committee held a quarterly 

meeting, with Marsh and Byrne in attendance.  At the meeting, SCANA executives identified 

“schedule delays” and the receipt of “production tax credits” as “key risk[s]” and rated them 

“Red.” 

210. SCANA defined “Red” risk areas as:  “Higher area of management concern.  

Events related to this area have progressed or are progressing in a manner that could be 

ultimately adverse to the accomplishment of SCANA’s strategic plan.  Requires very heightened 

management attention and activity in this area.” 

211. On February 18, 2016, Byrne participated in SCANA’s fourth quarter earnings 

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call and utilized a PowerPoint presentation.  On the call, Byrne referred to a slide that indicated 

the guaranteed substantial completion dates as being August 2019 for Unit 2 and August 2020 

for Unit 3.  Byrne did not disclose that this schedule was unreliable and that, based on the most 

recent information presented to him, it appeared likely that neither nuclear unit would be 

completed by those dates. 

212. SCANA posted the transcript from the earnings call and the PowerPoint 

presentation on its website.  Investors were also allowed to listen to the earnings call. 

213. In addition, despite knowing that the expansion project was severely behind 

schedule, SCANA filed a Form 10-K with the SEC on February 26, 2016, that repeated the same 

false and misleading statements regarding the project that had appeared in earlier filings. 

214. SCANA’s Form 10-K stated that the nuclear production tax credits “could total as 

much as approximately $1.4 billion.”  SCANA failed to disclose that its nuclear team, including 

Byrne and Marsh, had concluded that Westinghouse would not complete Unit 2 or Unit 3 in 

accordance with the revised schedule and, thus, that the schedule was unreliable. 

215. SCANA’s Form 10-K further stated, falsely, that “[b]ased on the guaranteed 

substantial completion dates provided above [August 2019 and August 2020], both New Units 

are expected to be operational and to qualify for the nuclear production tax credits; however, 

further delays in the schedule or changes in tax law could impact such conclusions.”  At the time, 

SCANA and its senior management, including Marsh and Byrne, knew that, based on the current 

rate of progress, the new nuclear units would not be completed in time to qualify for the 

production tax credits.  SCANA and its senior management, including Marsh and Byrne, also 

knew that there would be substantial additional delays and, thus, the revised schedule was not 

reliable. 

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216. SCANA’s Form 10-K omitted the true status of the nuclear expansion project, 

including the unreliability of the schedule and the serious doubts about the new units qualifying for 

the production tax credits.  Instead, SCANA’s Form 10-K misleadingly referenced guaranteed 

substantial completion dates of August 2019 for Unit 2 and August 2020 for Unit 3. 

217. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the 

Sarbanes-Oxley Act, Marsh certified that he had reviewed the annual filing and that it contained no 

untrue statements.  Marsh knew, however, that his certification was false and misleading. 

218. Byrne also knew that the information in SCANA’s annual filing was false and 

misleading.  Nevertheless, on February 26, 2016, Byrne signed a sub-certification letter in 

connection with the filing that falsely stated he had “no knowledge of any fraud or suspected fraud 

affecting SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form 

10-K. 

219. On March 2 and 3, 2016, SCANA executives, including Byrne, made a PowerPoint 

presentation at investor conferences sponsored by Morgan Stanley and UBS Securities, LLC. 

220. In the presentations, SCANA claimed that it delivered “strong investor value” 

because the company enjoyed “investment grade credit ratings,” a “constructive regulatory 

environment,” and because the company had “transparent” operations. 

221. SCANA also stated that Unit 2 and Unit 3 were scheduled to be completed by 

August 2019 and August 2020, even though the company and its senior executives knew that those 

scheduled completion dates were not achievable. 

222. On March 9, 2016, Byrne participated in a similar presentation at an investor 

conference sponsored by Barclays. 

223. Marsh knew that these investor conferences were taking place and the content of 

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the PowerPoint presentations that SCANA executives, including Byrne, were making at them.    

224. On March 17, 2016, Byrne attended a meeting with Westinghouse and its new 

sub-contractor where, among other topics, they discussed the continuing delays in meeting 

construction milestones.  As another SCANA executive said at the meeting, “we need results.” 

225. On March 21, 2016, SCANA’s senior management, including Marsh and Byrne, 

participated in a meeting that included the Board of Directors from SCANA and Santee Cooper.  

At the meeting, a member of SCANA’s Board noted that “for whatever reason progress isn’t 

happening and that needs to change.”  Marsh did not disagree with this statement and, according 

to notes from the meeting, he acknowledged that “the ultimate problem is performance.” 

226. On March 28, 2016, SCANA held another Risk Management Committee meeting, 

which was attended by Marsh and Byrne.  At the meeting, executives again identified “schedule 

delays” and the receipt of “production tax credits” as “key risk[s]” facing the company. 

227. On March 29, 2016, SCANA filed a Form 14A Proxy Statement with the SEC.   

228. As part of that filing, Marsh signed a letter to the company’s shareholders.  In the 

letter, Marsh wrote:  “During a very challenging 2015, we continued to move forward and make 

substantial progress on initiatives important to our company such as our new nuclear 

construction project[.]” 

229. SCANA’s Proxy Statement incorporated by reference the company’s previous 

filings with the SEC.  In addition, the Proxy Statement repeated the same misstatements that the 

company had made in its periodic filings regarding the construction schedule for the new nuclear 

units and the receipt of federal tax credits.  Specifically, SCANA stated that the tax credits 

“could total as much as approximately $1.4 billion” and that “[b]ased on the guaranteed 

substantial completion dates provided above [August 2019 and August 2020], both New Units 

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are expected to be operational and to qualify for the nuclear production tax credits; however, 

further delays in the schedule or changes in tax law could impact such conclusions.” 

230. On April 15, 2016, SCANA’s nuclear team sent the company’s senior 

management, including Marsh and Byrne, a document entitled “SGE&G List.”  In the document, 

SCANA’s nuclear team agreed with many of Bechtel’s observations and recommendations 

regarding the lack of progress on the expansion project. 

231. In addition, SCANA’s nuclear team made the following comments regarding the 

problems plaguing the project: 

• “Work activities should be planned based on a realistic evaluation of the 

work, rather than optimistic projections due to schedule pressure from 

management”; 

• “Work was performed out of sequence to support fictitious milestone 

completion of Setting CA20 Module, knowing that a significant effort was 

required to complete the module”; 

• “Contractor needs to resource load the schedule based on reasonable unit rates 

and set performance goals and schedule based on realistic information.  

Overly aggressive and optimistic schedule dates are not the best way to 

encourage craft labor performance.  This has been demonstrated by the 

repeated failure of the contractor to meet published schedule dates for project 

milestones”; and 

• “The Contractor has continually modified metrics and graphs to obscure the 

poor performance.  Baselines have been repeatedly set and then re-set at a 

later date, thus making performance measurement impossible.  We should be 

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looking at total project data instead of short-term 9–12 months[.]” 

232. Finally, in the “SCE&G List” document, SCANA’s nuclear team noted to Marsh 

and Byrne:  “It would be a good idea to encourage and recognize meaningful progress and 

successes.  This is difficult to accomplish when the project is not seeing meaningful successes.” 

233. On April 28, 2016, despite receiving the “SCE&G List” document less than two 

weeks earlier, Byrne misleadingly touted significant progress being made on the project during 

SCANA’s first quarter earnings call.  Byrne also presented several photographs of the 

construction site to show that progress was being made on the project.  In reality, Byrne knew 

that the project was severely behind the revised schedule and was continuing to fall further 

behind that schedule every month. 

234. SCANA posted the transcript from the earnings call on its website.  In addition, 

investors were allowed to listen to the earnings call. 

235. On May 6, 2016, SCANA filed a Form 10-Q with the SEC that repeated the same 

false and misleading statements as the company’s prior filings.  SCANA’s Form 10-Q also omitted 

the true status of the nuclear expansion project, including the unreliability of the schedule and the 

serious doubts about the new units qualifying for the production tax credits. 

236. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the 

Sarbanes-Oxley Act, Marsh certified that he had reviewed the periodic filing and that it contained 

no untrue statements.  Marsh knew, however, that his certification was false and misleading. 

237. Similarly, Byrne knew that the information in SCANA’s periodic filing was false 

and misleading.  Nevertheless, on May 6, 2016, Byrne signed a sub-certification letter in 

connection with the filing that falsely stated he had “no knowledge of any fraud or suspected fraud 

affecting SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form 

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10-Q. 

238. On May 19, 2016, Byrne attended a meeting with Westinghouse regarding the 

project.  According to the minutes from the meeting, a member of SCANA’s nuclear team noted 

that Westinghouse was not achieving the schedule milestones that it needed to meet for the 

project to be completed by August 2019 (Unit 2) and August 2020 (Unit 3), and that 

Westinghouse’s mitigation efforts to date had not been successful in remedying these problems.  

They also discussed difficulties in other areas of the project as well that were affecting the 

schedule, such as procurement. 

239. The EPC Amendment assumed that Westinghouse could complete Unit 2 by 

August 2019 and Unit 3 by August 2020 by achieving a percent complete per month rate of 3%.  

At the May 19 meeting attended by Byrne, however, Westinghouse acknowledged that during the 

first four months of 2016 it had averaged a monthly percent complete rate of only 0.5%.  

SCANA’s nuclear team knew that, at that rate of progress, it would take an additional seven 

years to finish the project. 

240. Nevertheless, SCANA published several press releases in 2016 that touted various 

milestones being met.  By regularly communicating to the public that the project was 

progressing, SCANA misled investors and others as to the true status of the project and failed to 

disclose material information revealing that the schedule was unreliable, significant additional 

delays were likely to occur, and the critical tax credits were at risk.  For example, on April 18, 

2016, SCANA issued a press release titled, “SCE&G Achieves Construction Milestone With 

Placement of Unit 3 Vessel Ring.”  In the press release, SCANA wrote that “[p]rogress continues 

with approximately 3,700 Westinghouse personnel and subcontractor workers on site daily.” 

 

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SCANA’s May 26, 2016 Petition to the PSC 

241. On May 26, 2016, SCANA submitted another petition to the PSC to update the 

construction and capital cost schedules on the nuclear expansion project.  Marsh and Byrne were 

aware of the petition, which was made publicly available shortly after it was filed. 

242. In its petition, SCANA requested PSC approval to exercise the fixed price option 

under the EPC Amendment.  As SCANA explained, “under that option, the price of the work 

necessary to complete the Units is fixed at $3.345 billion.”  SCANA had notified Westinghouse 

a few days earlier that it intended to exercise the fixed price option. 

243. SCANA also requested that the PSC approve the August 2019 (Unit 2) and 

August 2020 (Unit 3) completion dates in the EPC Amendment.  SCANA reiterated that it could 

receive federal production tax credits of $2.2 billion “when grossed up for taxes” if Unit 2 and 

Unit 3 are completed by January 1, 2021. 

244. At the same time, SCANA requested that the PSC find its cost and schedule 

changes to be the result of reasonable and prudent oversight of the project by the company. 

245. In its May 26, 2016 petition to the PSC, SCANA contradicted the findings of its 

own nuclear team and Bechtel, including the fact that the construction schedule was unreliable 

and that the company was unlikely to qualify for the production tax credits. 

246. Additionally, SCANA pressured its partner on the project, Santee Cooper, not to 

disclose the existence or content of Bechtel’s assessment. 

247. On May 26, 2016, SCANA filed a Form 8-K with the SEC and issued a press 

release announcing the filing of the update petition with the PSC.  SCANA misleadingly stated 

in them:  “The construction schedule reflected in the Petition indicates a guaranteed substantial 

completion date for Unit 2 of August 2019 and a guaranteed substantial completion date for Unit 

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3 of August 2020.”  SCANA and its senior executives, including Marsh and Byrne, knew that the 

schedule was unreliable and that neither new unit would be completed by those dates. 

248. In addition, in the May 26, 2016 press release, Marsh misleadingly stated:  

“Construction of the two new nuclear units continues to progress.”  In fact, Marsh knew that the 

project was getting further behind schedule every month. 

Defendants Mislead Financial Analysts About the Project 

249. On June 2, 2016, Marsh and Byrne were forwarded an e-mail written by Santee 

Cooper’s Senior Vice President for Nuclear Energy regarding the continued lack of progress on 

the project.  The Santee Cooper executive wrote:  “Unfortunately, five months after 

[Westinghouse] has had complete control of the Project, there is little evidence that [it] is taking 

the steps necessary to resolve these challenges and relieve pressure on the substantial completion 

dates.  Each meeting I attend we continue to report out and discuss the same basic issues as 

progress on the critical path continues to slip.” 

250. Later that same day, SCANA executives, including Byrne, met with analysts from 

Wells Fargo Securities, LLC to discuss the expansion project at V.C. Summer.  Marsh had met 

with the analysts the night before. 

251. At the June 2, 2016 meeting, Byrne presented a PowerPoint presentation that 

misleadingly stated that the “new in service dates” for Unit 2 was “August 2019” and for Unit 3 

was “August 2020.”  Byrne knew that Unit 2 and Unit 3 were nowhere close to being “in 

service” by those August dates – i.e., they would not be producing power in time to qualify for 

the federal production tax credits.  Byrne nevertheless presented, as he had many times before, 

photographs of the construction site that purported to show meaningful progress being made on 

the project all the while knowing that the project was significantly behind schedule. 

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252. The next day, Byrne again touted the August 2019 and August 2020 “in service 

dates” in a video presentation to Fitch Ratings, Inc., the entity that was rating SCANA’s debt. 

253. Neither Byrne nor any other SCANA representative told Fitch about Bechtel’s 

findings that Unit 2 and Unit 3 would not be completed on schedule.  In addition, SCANA and 

its executives, including Byrne, did not disclose the continuing deterioration of the project 

schedule, including the monthly data that showed construction was not progressing at the rate 

necessary to complete Unit 2 by August 2019 and Unit 3 by August 2020.  

SCANA Issues Another $500 Million in First Mortgage Bonds 

254. On August 27, 2015, SCANA filed with the SEC another Automatic Shelf 

Registration statement on Form S-3ASR to register the sale of first mortgage bonds.  The Form S-

3ASR registration statement incorporated by reference certain prior filings and all subsequently 

filed periodic reports filed by SCANA, including the periodic reports discussed in this Complaint.  

Marsh signed the Form S-3ASR. 

255. On June 8, 2016, SCANA issued $500 million in First Mortgage Bonds.  SCANA 

issued $425 million in bonds with an interest rate of 4.10% and a maturity date of June 15, 2046, 

and $75 million in bonds with an interest rate of 4.50% and a maturity date of June 1, 2064. 

256. Byrne’s misleading presentation to Fitch the week before had the desired effect.  

Fitch reaffirmed SCANA’s “Stable” rating on June 9, 2016, which was the day after SCANA 

issued the First Mortgage Bonds.  Fitch also gave SCANA’s new bond offering an “A-” rating. 

257. SCANA was able to sell all $500 million in First Mortgage Bonds at, as one 

executive described it, “amazing interest rates.”  SCANA used proceeds from the bond sales on 

the nuclear expansion project at V.C. Summer. 

258. Marsh and Byrne knew about the $500 million bond offering and the 

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representations in its related registration statement filed with the SEC.  Indeed, Marsh 

congratulated the finance team for selling the bonds. 

259. At this time, SCANA had a market capitalization of around $10 billion. 

Defendants Mislead the PSC (Again) 

260. In June 2016, SCANA and Santee Cooper were still trying to evaluate 

recommendations made by Bechtel and how those recommendations should be implemented.  

On June 17, 2016, Marsh received a “Project Assessment Report” and an “Executive Summary” 

from SCANA’s nuclear team that addressed some of the issues raised by Bechtel. 

261. SCANA’s nuclear team recognized that Bechtel had raised “valid concerns” with 

the construction schedule.  The team also listed the development of “a project schedule plan to 

achieve construction completion of at least 3% per month” as a “key issue.” 

262. A little over a week later, on June 27, 2016, Marsh and Byrne attended a Risk 

Management Committee meeting.  At the meeting, SCANA executives again identified 

“schedule delays” and the receipt of “production tax credits” as “key risk[s]” facing the company 

and rated them “Red,” meaning that there was significant risk that the company would not 

qualify for the tax credits. 

263. The very next day, on June 28, 2016, SCANA filed a revised rate petition with the 

PSC in which it sought to receive increased rates from its customers.  Marsh and Byrne were 

aware of the petition, and the petition was made publicly available shortly after it was filed. 

264. On June 29, 2016, Byrne received a copy of a PowerPoint presentation that 

Westinghouse and its sub-contractor planned to present the next day to senior executives at 

SCANA and Santee Cooper. 

265. The presentation provided a grim status of the expansion project in “5 Project Focus 

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Areas.”  These five focus areas included:  (i) Procurement; (ii) Modules – Structural and 

Mechanical; (iii) Prevention of and Timely Resolution of Design Issues; (iv) Construction 

Resources; and (v) Construction Efficiency/Schedule Adherence.  The presentation made clear that 

the extensive problems in all of the focus areas affected the reliability of the construction schedule 

and raised doubts about Westinghouse’s ability to complete Unit 2 and Unit 3 in time for SCANA 

to qualify for the $1.4 billion in production tax credits. 

266. Although Westinghouse was going to present the information, SCANA’s own 

nuclear team drafted slides regarding the five project focus areas for the presentation. 

267. For Procurement, SCANA’s nuclear team wrote:  “The project does not have 

equipment and commodities that meet requirements readily available to support construction work 

fronts.  This impacts the ability of the project to reliably achieve schedule.” 

268. For Modules – Structural and Mechanical, SCANA’s nuclear team wrote:  

“Modules are not being fabricated and delivered in accordance with the project execution plan.  

Modules are delivered later than the construction need date.  A significant number of modules are 

delivered incomplete or with quality issues.  This requires outfitting, rework or repair at the project 

site that is not part of the baseline schedule.” 

269. For Prevention of and Timely Resolution of Design Issues, SCANA’s nuclear team 

wrote:  “The project does not adequately address constructability issues requiring design changes 

or interpretations.  All engineering design is not finalized in time to procure adequate material and 

plan work in advance of construction.  This adversely impacts the ability to reliably achieve 

schedule.”  [Emphasis added]. 

270. For Construction Resources, SCANA’s nuclear team wrote:  “The project does not 

have sufficient resources to support active construction work fronts.  This impacts the ability of the 

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project to reliably achieve schedule or mitigate issues from engineering, procurement, or 

constructability delays.” 

271. Finally, for Construction Efficiency/Schedule Adherence, SCANA’s nuclear team 

wrote:  “The project performance factor (PF) is consistently above the goal (PF>2 each 

month in 2016) and trending in a negative direction.  The majority of project milestones are 

not met on their scheduled dates.  The percentage of schedule activities completed on time is 

well below the goal and does not allow for a reliable Integrated Project Schedule.”  [Emphasis 

added]. 

272. On June 30, 2016, Westinghouse and its sub-contractor made the presentation at a 

meeting that included Santee Cooper’s and SCANA’s senior management, including Marsh and 

Byrne. 

273. The very next day, July 1, 2016, Marsh and Byrne submitted written testimony to 

the PSC in support of SCANA’s petition that the PSC adopt August 2019 and August 2020 as the 

Guaranteed Substantial Completion Dates for Unit 2 and Unit 3 and approve the fixed price option.  

Their testimony was made available to the investing public. 

274. Marsh began by stating:  “All company witnesses testify in support of the 

reasonableness and prudency of the updated construction schedule and the related schedule of 

capital costs it represents.  From my knowledge of the project and my perspective as SCE&G’s 

Chief Executive Officer, I can affirmatively testify, as I have testified in prior proceedings, that 

SCE&G is performing its role as project owner in a reasonable, prudent, and cost-effective 

manner.”  In fact, contrary to this statement, Marsh knew that Bechtel had raised serious doubts 

about the manner in which SCANA was overseeing the nuclear expansion project. 

275. Marsh also misleadingly stated:  “The federal tax credits that are available to the 

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project are worth a total of $2.2 billion to customers.  Both of our plants must produce power 

before the end of 2020 to qualify for the full amount of these credits.  The [guaranteed substantial 

completion date] for Unit 2 is now 16 months ahead of that deadline and th[e] [guaranteed 

substantial completion date] for Unit 3 is four months ahead of it.”  Marsh knew that the 

construction schedule was unreliable and unachievable, and that neither nuclear unit was likely to 

be completed in time to qualify for the production tax credits. 

276. Marsh concluded:  “In light of these facts, we believe that the logical and prudent 

choice is to proceed with the construction plan and apply the BLRA as written.” 

277. In his written testimony, Byrne falsely stated that the August 2019 and August 2020 

substantial completion dates and the construction schedule that supported them were reasonable. 

278. Specifically, Byrne testified, falsely, that:  “The substantial completion dates and 

the construction schedules . . . are based on extensive construction data that Westinghouse has 

provided to [SCANA] . . . .  [SCANA’s] construction experts have reviewed this schedule and 

found that its scope and sequencing is logical and appropriate. . . .  Consistent with its 

responsibilities as Owner, [SCANA] has carefully reviewed and evaluated all information that is 

available related to the project and schedule and finds it to be reasonable.  In my opinion, 

Westinghouse . . . [has] a reasonable construction plan in place to achieve the Guaranteed 

Substantial Completion Dates” (i.e., August 2019 and August 2020).  [Emphasis added]. 

279. Byrne concluded by falsely stating:  “It is my considered opinion that [the revised 

schedule] represents a reasonable and prudent schedule for completing the project . . . and should 

be adopted as an update to the construction schedule that was initially adopted[.]”  As additional 

support for the petition, Byrne attached photographs of the project to his pre-filed testimony to 

show progress being made on completing the new nuclear units. 

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280. In terms of the production tax credits, Byrne testified that SCANA “and its 

customers stood to lose approximately $2.2 billion in projected benefits if neither Unit were to 

meet the deadline.”  Byrne then falsely claimed that SCANA was “able to address this problem” 

through the EPC Amendment. 

281. At the same time, another SCANA executive falsely testified before the PSC that:  

“In each update case since 2009, the Company has come before the [PSC] with the best 

information available concerning the anticipated construction schedule for completing the Units 

and the anticipated costs associated with that schedule.”  That executive went on to say:  “The 

current schedules reflect the best information available about the anticipated costs and construction 

timetables for completing the project.” 

Defendants Mislead the ORS Regarding the Project 

282. On or about June 30, 2016, the ORS’s Executive Director sent a letter to Marsh 

detailing the ORS’s concerns regarding the validity of the schedules for Unit 2 and Unit 3.  The 

letter, which the ORS drafted to be sent to the Public Utilities Review Committee (“PURC”) and 

the governor of South Carolina, explained:  “The ORS is currently in a heightened state of 

concern regarding the construction cost overruns and schedule delays for V.C. Summer (VCS) 

Nuclear Units 2 & 3. . . .  In the case of Unit 2, ORS believes that, while the date in the filing of 

August 31, 2019 is unlikely to be met, it is possible that Unit 2 may still be able to qualify for the 

Federal Production Tax Credits that expire on December 31, 2020.  However, completing Unit 2 

in time to receive the Federal Production Tax Credits will require improvements to the current 

construction methodology.” 

283. The ORS’s letter continued:  “ORS has no confidence that Unit 3 can meet the 

Current Federal Production Tax Credit Deadline of December 31, 2020. . . .  This makes the 

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validity of the current schedule highly suspect.” 

284. The ORS’s Executive Director requested that SCANA “respond to the issues 

raised in the letter before they complete the final version.”  Marsh forwarded ORS’s letter to 

Byrne and other SCANA executives on July 1, 2016.  Marsh tasked Byrne and another SCANA 

executive with drafting a response on behalf of SCANA that could be incorporated into ORS’s 

letter. 

285. The ORS also informed SCANA that it wanted to depose a Westinghouse 

representative regarding the project and, in particular, the EPC Amendment and the project 

schedule. 

286. On June 29, 2016, Marsh and another SCANA executive met with the ORS’s 

Executive Director to discuss the deposition of a Westinghouse representative. 

287. Marsh drafted his own “notes for discussion” to use in an upcoming conversation 

with the ORS’s Executive Director that made clear his desire for the ORS not to express its 

doubts about the project publicly or to depose a representative from Westinghouse.  Marsh’s 

notes also describe the impact such public statements by the ORS would have on SCANA’s 

ability to sell securities at favorable rates. 

288. Specifically, Marsh wrote:  “If you [ORS] go forward, it will be hard to put this 

genie back in the bottle.  Potential for devastating results.” 

289. Marsh continued:  “The financial markets see the ORS, and you specifically, as 

the face of regulation in SC. 

• Credit rating agencies 

• Bond underwriters 

• Investment analysts 

• Shareholders 

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• Banks 

Your planned actions will send shock waves to this group.  You will be overrun with 

calls and inquiries.  They will jump to conclusions and publish their thoughts and 

concerns.” 

290. Marsh then noted:  “Our public disclosures to the SEC and investors will have to 

address this and address as a risk.  The ‘supportive regulatory environment’ in SC is the 

foundation of our bond ratings and the support we receive from the financial community.  

Without that support, we will have difficulty selling our securities at favorable prices, which 

will raise prices for our customers.”  [Emphasis added]. 

291. In an attempt to reassure ORS and assuage its concerns regarding the schedule, 

Marsh’s notes also directed ORS to recently filed PSC testimony by Byrne stating that the 

schedule was reasonable and achievable – testimony that Marsh knew was false. 

292. SCANA’s senior management, including Marsh and Byrne, engaged in a 

concerted effort to persuade ORS not to state publicly that it thought SCANA might not qualify 

for the production tax credits. 

293. Among other changes, SCANA tried to eliminate the statements in ORS’s letter 

about the reliability of the schedule and the likelihood of the company receiving production tax 

credits.  ORS had originally written:  “ORS has no confidence that Unit 3 can meet the current 

Federal Production Tax Credit Deadline of December 31, 2020. . . .  This makes the validity of 

the current schedule highly suspect.”  SCANA sought to change the language to:  “In sum, ORS 

believes that completing Unit 2 by the August 31, 2019 date in [SCANA’s] most recent filing 

and completing Unit 3 in time to receive the Federal Production Tax Credits that expire on 

December 31, 2020, will require improvements to the current construction methodology.” 

294. In addition, SCANA mentioned the “five project focus areas” in its response to 

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the ORS’s draft letter, but failed to describe all of the problems in those areas that made the 

current schedule unreliable.  Just a few days earlier, SCANA’s nuclear team had written:  “The 

percentage of schedule activities completed on time is well below the goal and does not allow for a 

reliable Integrated Project Schedule.”  Yet, SCANA failed to include this or similar language in its 

response to the ORS. 

295. SCANA’s attempt to soften the language in ORS’s letter succeeded.  The letter that 

ORS submitted to the PURC did not say that “ORS has no confidence that Unit 3 can meet the 

Current Federal Production Tax Credit Deadline of December 31, 2020.” 

Defendants Mislead the Nuclear Advisory Council 

296. On July 13, 2016, Marsh received an e-mail from a member of the company’s 

nuclear team regarding construction milestones for June 2016.  Marsh was told that Westinghouse 

“completed 4 of the 27 projected milestones (14.8% complete 85.2% not complete).”  Another 

SCANA nuclear team member noted that this was a “dismal performance.”  

297. The same day, Santee Cooper’s CEO sent Marsh an e-mail regarding the lack of 

progress on the project.  Santee Cooper’s CEO wrote:  “What has particularly frustrated Santee 

Cooper from the date of the 2015 [EPC] Amendment is [Westinghouse’s] failure to seize an 

opportunity and significantly ramp up construction progress at the site.  The primary purpose of 

the fixed price option and milestone payment schedule is to incentivize [Westinghouse] to get the 

units built.  Through the last 6 months, while [SCANA and Santee Cooper] have paid $600 

million dollars, construction progress has only been an aggregate of 3%.  Moreover, for the June 

billing period, had [SCANA and Santee Cooper] accepted [Westinghouse’s] milestones and 

payment schedule, which contained twenty-seven milestones and requested payment of $156 

million for the month, only four of the twenty-seven were completed, which would entitle 

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[Westinghouse] to payment of just $23.1 million.  This rate of progress will never meet the 

current completion schedule, impacting production tax credits, the availability of cheaper 

energy for our customers, and bringing the costs of construction to conclusion.”  [Emphasis 

added]. 

298. Marsh forwarded the e-mail from Santee Cooper’s CEO to Byrne on July 14, 2016. 

299. That same day, Byrne appeared at one of the Nuclear Advisory Council’s meetings.  

The Nuclear Advisory Council was a group that advised the Governor of South Carolina on issues 

pertaining to nuclear activities in the state.  Byrne misleadingly testified at the meeting that Unit 2 

and Unit 3 would be “online” and “making power” by August 2019 (Unit 2) and August 2020 

(Unit 3), even though Byrne knew that the construction schedule was unreliable and the project 

was significantly behind that schedule. 

300. At the July 14, 2016 meeting, Byrne and a council member also engaged in the 

following discussion: 

Council:   What is your best estimate when you think you are going to be done? 

Byrne:      We think the current schedule is achievable.  Their guaranteed substantial 

completion date for us contractually is August 2019 for the first unit and 12 

months later for the second. 

Council:   Completed, does that mean online? 

Byrne:   Yes that means on line, making power. 

301. Byrne knew that his statements to the Nuclear Advisory Council were false. 

Defendants Make False and Misleading Statements on SCANA’s 
Second Quarter Earnings Call and in SCANA’s Quarterly Report 
 
302. On July 21, 2016, Byrne attended a meeting with other members of SCANA’s 

nuclear team and Westinghouse.  At the meeting, Westinghouse reported that the monthly percent 

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complete percentages for March through June 2016 were still far below the 3% needed to complete 

Unit 2 by August 2019 and Unit 3 by August 2020. 

303. At this time, Byrne knew that eight months after entering into the EPC Amendment 

the pace of construction was still lagging far behind where it needed to be for SCANA to complete 

the new units on schedule.  More specifically, Byrne knew that for the first six months of 2016 the 

monthly percent complete percentages were as follows: 

MONTH EXPECTED PERCENT 
COMPLETE 

ACTUAL PERCENT 
COMPLETE 

January 2016 3% 0.3% 

February 2016 3% 0.5% 

March 2016 3% 0.6% 

April 2016 3% 0.6% 

May 2016 3% 0.7% 

June 2016 3% 0.8% 

TOTAL 18% 3.5% 

 
304. One week later, on July 26, 2016, Marsh and Byrne attended SCANA’s quarterly 

Board of Directors meeting. 

305. At the meeting, Byrne presented a “New Nuclear Construction Update” that 

highlighted the unreliability of the construction schedule and raised serious doubts about 

SCANA’s ability to complete the expansion project in time to receive the production tax credits. 

306. Byrne’s presentation addressed “Five Project Focus Areas,” and stated: 

• “The project does not have equipment and commodities that meet requirements 

readily available to support construction work fronts.  This impacts the ability 

of the project to reliably achieve schedule.” 

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• “Modules are not being fabricated and delivered in accordance with the project 

execution plan.  Modules are delivered later than the construction need date.  A 

significant number of modules are delivered incomplete or with quality issues.  

This requires outfitting, rework or repair at the project site that is not part of the 

baseline schedule.” 

• “The project does not adequately address constructability issues requiring 

design changes or interpretations.  All engineering design is not finalized in 

time to procure adequate material and plan work in advance of construction.  

This adversely impacts the ability to reliably achieve schedule.” 

• “The project does not have sufficient resources to support active construction 

work fronts.  This impacts the ability of the project to reliably achieve schedule 

or mitigate issues from engineering, procurement or constructability delays.” 

• “The project performance factor (PF) is consistently above the goal and 

trending in a negative direction.  The majority of project milestones are not met 

on their scheduled dates.  The percentage of schedule activities completed on 

time is well below the goal and does not allow for a reliable Integrated Project 

Schedule.” 

307. On the same day that Byrne was presenting this dire assessment of the project 

schedule to SCANA’s Board of Directors, other members of SCANA’s nuclear team made a 

presentation to the ORS regarding the status of the project that did not include any such language.  

Instead, SCANA’s presentation to the ORS identified the same “Big Five Focus Areas” 

(procurement, schedule, construction, engineering, and modules), but instead of noting the severe 

problems in each area the SCANA nuclear team touted the progress being made in all of them. 

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308. Just two days later, on July 28, 2016, Byrne made false and misleading statements 

in SCANA’s second quarter earnings call with analysts. 

309. An analyst from UBS Securities, LLC asked Byrne:  “So I wanted to follow up a 

little bit on the timetable and schedule on the project and specifically on the milestones, if you 

could provide a little bit more of an update there, and ultimately, if and/or when you expect to do – 

or hear back from Flour [Westinghouse’s sub-contractor] as to more of an integrated schedule 

update for the overall project.” 

310. Byrne responded with the following misstatement:  “The guaranteed substantial 

completion dates remain at August of 2019 for unit 2 and August of 2020 for unit 3.  We 

don’t see anything to change those.  Fluor’s review of the schedule is really something that 

should conclude somewhere in the third quarter and they will be giving that to Westinghouse. . . .  I 

don’t expect anything to necessarily change from that review, save for perhaps the number of 

hours it might take and shifts that they would have to put on, that kind of thing.  So the goal of that 

schedule review was to hold the dates constant and see what it would take to accomplish those 

dates.  So I don’t expect anything dramatic to come from that.”  [Emphasis added]. 

311. SCANA posted the transcript from the earnings call on its website.  In addition, 

investors were allowed to listen to the call. 

312. Following Byrne’s affirmation of the guaranteed substantial completion dates 

during the July 28, 2016 earnings call, analysts issued reports emphasizing SCANA and its 

senior executives’ confidence that Unit 2 and Unit 3 would be completed by August 2019 and 

August 2020.  Analysts stated: 

• “management remained resilient today on its project schedule”;  

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• “importantly . . . the guaranteed substantial completion dates are not being 

debated”; 

•  “[m]anagement expressed confidence that the guaranteed substantial completion 

dates of Aug. 2019 (Unit 2) and Aug. 2020 (Unit 3) are achievable”; and 

• “[c]onstruction seems to be progressing on schedule to meet the completion dates 

August 2019/2020 for Units 2 and 3” and  “SCG doesn’t expect major changes to 

the schedule.” 

313. On July 29, 2016, Marsh told the company’s board of directors in an e-mail that 

Byrne and another executive “did a great job answering questions” on the earnings call.   

314. On August 5, 2016, SCANA’s nuclear team, including Byrne, made another 

misleading presentation to the ORS.  In particular, SCANA’s nuclear team failed to disclose the 

significant problems in the five project areas that made the construction schedule unreliable and 

Unit 2 and Unit 3 unlikely to be completed in time for SCANA to qualify for the tax credits. 

315. Later in August 2016, just a few weeks after the earnings call, SCANA and Santee 

Cooper argued before a Dispute Resolution Board that they should not have to pay Westinghouse 

millions of dollars each month for work that Westinghouse was supposed to complete under the 

construction schedule but had not done so.  The Dispute Resolution Board had been established to 

resolve disputes between SCANA/Santee Cooper and Westinghouse. 

316. At the hearing, Byrne made a presentation regarding the lack of progress by 

Westinghouse on completing Unit 2 and Unit 3.  Byrne stated, among other things, that:  “The 

transition to Fluor [a new sub-contractor] did not yield the improvements to PF [performance 

factor] and ratios that [Westinghouse] had expected and the EAC contemplated”; SCANA and 

Santee Cooper are “concerned that [Westinghouse] cannot complete the Project within the Fixed 

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Price Option”; and Westinghouse “has had schedule slippage and may be unable to complete Units 

2 and 3 by the current GSCDs [guaranteed substantial completion dates], which could put tax 

credits at risk.” 

317. In other words, when Byrne spoke to financial analysts regarding the project, he 

confidently touted the construction schedule and stated that the new nuclear units would be 

completed in time to receive the production tax credits.  Around the same time, when Byrne spoke 

to the Dispute Resolution Board about paying Westinghouse under the EPC Amendment, Byrne 

expressed concern that Unit 2 and Unit 3 would not be completed in time for SCANA to receive 

the production tax credits and noted that Westinghouse was not meeting the milestones in the 

construction schedule that would allow the new units to be completed in time to do so. 

318. On August 5, 2016, SCANA filed a Form 10-Q with the SEC that repeated the 

same false and misleading statements that the company made in its earlier filings.  SCANA’s Form 

10-Q also omitted the true status of the nuclear expansion project, including the unreliability of the 

schedule and the serious doubts about the new units qualifying for the production tax credits. 

319. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the 

Sarbanes-Oxley Act, Marsh certified that he had reviewed the periodic filing and that it contained 

no untrue statements.  Marsh knew, however, that his certification was false and misleading. 

320. Similarly, Byrne knew that the information in SCANA’s periodic filing was false 

and misleading.  Nevertheless, on August 5, 2016, Byrne signed a sub-certification letter in 

connection with the filing that stated he had “no knowledge of any fraud or suspected fraud 

affecting SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form 

10-Q. 

321. SCANA also repeated the same false and misleading statements in its BLRA 

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Quarterly Report regarding the construction schedule, its oversight of the project, and its 

disclosures to the PSC and ORS.  SCANA filed the report on August 12, 2016. 

322. On August 31, 2016, SCANA published a press release titled, “SCE&G Achieves 

History-Making Milestone With Placement of V.C. Summer Unit 2 Reactor Vessel.”  In the press 

release, Marsh is quoted as saying:  “Successful placement of the Unit 2 reactor vessel is a very 

significant milestone on our path to completing the construction of the two nuclear units.”  

SCANA failed to disclose the true status of the project in its press release. 

Defendants Make False and Misleading Statements at SCANA’S 
“Media Day” and on SCANA’s Third Quarter Earnings Call 

 
323. In 2016, SCANA established a Construction Oversight Review Board (“CORB”) to 

assuage Santee Cooper’s concerns that SCANA’s management and oversight capabilities were 

limited by its lack of expertise.  SCANA agreed to establish the CORB, which was supposed to 

provide an independent assessment of the project’s progress, in return for Santee Cooper remaining 

quiet about Bechtel’s findings.  As one SCANA executive described it:  “We agreed to the 

CORB in return for flushing the Bechtel report.” 

324. In September 2016, Marsh and Byrne each received copies of a draft report 

prepared by the CORB.  The draft report had a negative assessment of the project’s status and 

found that, as a result of continued delays, “[t]he Unit 2 and Unit 3 project schedules include 

significant risks to achieve substantial completion.”  In fact, according to the report, “[t]he current 

schedule for Unit 2 has slipped 5 months in a 6-month period[.]” 

325. Two weeks after receiving the draft CORB report, Marsh and Byrne appeared at a 

SCANA “Media Day” event to tout the progress being made on the project. 

326. Representatives from several news organizations attended the event, including the 

Associated Press, Charlotte Business Journal, and The State.  Each attendee received media kits 

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that included the following written misrepresentation:  “The vast majority of the major components 

and equipment have now been received on site, and the units are projected to be complete in 

August 2019 and August 2020 respectively.”  Marsh and Byrne both received a copy of the media 

kit, including this misrepresentation, the day before the event was held. 

327. During the “Media Day” event, which was held on September 21, 2016, Marsh 

misleadingly stated:  “This is a large project.  It’s a massive project, whatever term you want to put 

on it.  It’s a long term project, and in projects of this nature you’re going to have some challenges 

and issues.  We’ve had challenges and issues. . . .  We’ve been able to meet those challenges, make 

adjustments to the contract, and continue progress on the project.” 

328. Marsh also misleadingly stated that the company would qualify for more than $1 

billion in production tax credits.  Marsh concluded his remarks by stating:  “We’re excited about 

where we are.  We’ve had challenges.  We’ve been able to work through those challenges.”   

329. Byrne also made false statements during the “Media Day” event.  Specifically, 

Byrne falsely stated:  “The pace of this project is quickening.  We have run into some issues and 

roadblocks in the past, most of those issues and roadblocks are behind us.”  Byrne then displayed 

several photographs of the construction site to show progress being made on the project.  In fact, 

the project was severely behind schedule and falling further behind schedule every month. 

330. On September 22, 2016, Marsh submitted additional written testimony to the PSC 

in which he falsely stated:  “In [our update petition] filing, SCE&G proposed specific adjustments 

to the construction schedule and capital cost schedules for the V.C. Summer Units 2 & 3 . . . 

Through our pre-filed direct testimony, we presented evidence that the proposed adjustments were 

reasonable, were amply justified by the evidence and were in no way the result of imprudence on 

the Company’s part, which is the legal standard in these matters.”  This testimony was made 

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publicly available shortly after it was filed. 

331. Four days later, on September 26, 2016, Marsh and Byrne attended a meeting with 

Westinghouse that included a discussion of the five focus areas (procurement, schedule, 

construction, engineering, and modules) and the problems in all of those areas that were affecting 

the reliability of the schedule and the ability to complete the new units on time. 

332. On October 20, 2016, SCANA’s nuclear team, including Byrne, and Santee Cooper 

personnel attended another meeting with Westinghouse regarding the lack of progress on the 

expansion project.  At the meeting, a member of SCANA’s nuclear team noted that “there are so 

many loose ends” that he doesn’t have “a high level of comfort that we will be successful.”  

Another member of SCANA’s nuclear team noted that construction progress was still lagging 

behind where it needed to be in order to complete the project on schedule.  In short, SCANA’s 

nuclear team emphasized to Westinghouse that they need “more energy and commitment to 

meeting schedule dates” and that they need to “look at how they are managing schedule 

adherence.” 

333. At the same meeting, an executive from Santee Cooper questioned whether 

achieving the required monthly progress necessary to complete Unit 2 and Unit 3 under the 

schedule was “a pipe dream” and if they will “ever get there.” 

334. A week later, on October 27, 2016, Byrne participated in SCANA’s third quarter 

earnings call.  In a PowerPoint presentation for the call, Byrne misleadingly noted that the “new in 

service date[]” for Unit 2 was August 31, 2019, and for Unit 3 was August 31, 2020.  At the time 

he made these statements, Byrne knew that neither unit would be completed by those dates.  Byrne 

also indicated that a recent agreement with the ORS “supports the approval of the revised 

construction and capital cost schedules.”  Byrne failed to disclose that SCANA had withheld 

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information from the ORS, including that SCANA’s own nuclear team had determined that the 

schedule was unreliable and that SCANA’s senior management had informed the company’s 

Board of Directors of that determination. 

335. On the call, Byrne further stated that SCANA was “very happy with what Fluor 

[Westinghouse’s new sub-contractor] is doing for us” and that “they’ve been very successful 

recently.” 

336. SCANA posted the transcript from the earnings call and the PowerPoint 

presentation on its website.  In addition, investors were allowed to listen to the earnings call. 

337. On November 4, 2016, SCANA filed a Form 10-Q with the SEC that repeated the 

same false and misleading statements that the company made in its earlier filings. 

338. SCANA’s Form 10-Q also omitted the true status of the nuclear expansion project, 

including the unreliability of the schedule and the serious doubts about the new units qualifying for 

the production tax credits. 

339. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the 

Sarbanes-Oxley Act, Marsh certified that he had reviewed the periodic filing and that it contained 

no untrue statements.  Marsh knew, however, that his certification was false and misleading. 

340. In addition, Byrne knew that the information in SCANA’s periodic filing was false 

and misleading.  Nevertheless, on November 4, 2016, Byrne signed a sub-certification letter in 

connection with the filing that falsely stated he had “no knowledge of any fraud or suspected fraud 

affecting SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form 

10-Q. 

Defendants Make False and Misleading Statements 
on SCANA’s Fourth Quarter Earnings Call 
 
341. On November 7 and 8, 2016, Marsh and other executives from SCANA attended 

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the EEI Financial Conference in Scottsdale, Arizona.  The EEI Financial Conference involved, 

among other things, meetings between SCANA executives and financial analysts. 

342. At the EEI Financial Conference, SCANA executives utilized an “Investor 

Presentation” that addressed various topics, including the expansion project at V.C. Summer.  

SCANA’s Investor Presentation contained several false and misleading statements about the 

project.  Specifically, the presentation touted the “August 2019” and “August 2020” completion 

dates for Unit 2 and Unit 3, even though SCANA and its senior executives knew that the schedule 

was unreliable. 

343. On November 16, 2016, SCANA’s nuclear team met with representatives from 

Westinghouse to discuss the expansion project.  Notes from the meeting reflect that a member of 

SCANA’s nuclear team observed that at the current rate of progress it would take an additional 

seven years to complete Unit 2 – i.e., well beyond what SCANA and its senior executives, 

including Marsh and Byrne, had publicly acknowledged and far past the deadline for receiving the 

production tax credits. 

344. On November 22, 2016, SCANA’s senior executives, including Marsh and Byrne, 

attended a meeting to discuss the possible release of Bechtel’s Final Report.  According to an 

e-mail sent after the meeting, Marsh and Byrne were “adamantly opposed to th[e] release” of the 

report. 

345. That same day, Marsh and Byrne, along with representatives from Santee Cooper, 

attended a “CORB Debrief” meeting regarding the project.  The CORB reached many of the same 

conclusions regarding the expansion project as Bechtel had reached a year earlier. 

346. According to Byrne’s notes from the meeting, Santee Cooper’s CEO asked a 

CORB member:  “Is there a fully integrated proj schedule that takes proj to completion?”  The 

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CORB Chairman answered, “No.”  Another executive from Santee Cooper then asked whether 

they have the “right people” in Westinghouse and the new sub-contractor (Fluor).  The CORB 

Chairman answered, “Probably Not.”  Finally, another CORB member succinctly stated:  “Still 

don’t have realistic sked,” meaning that even after several years of construction and the 

expenditure of several billion dollars, there still was not a realistic project schedule to complete the 

new nuclear units. 

347. A draft written report followed the CORB “debrief.”  The draft report, which Marsh 

received a copy of, was critical of SCANA’s oversight of the expansion project.  The draft report 

noted that SCANA’s “oversight is insufficient for some project activities, including:  the Project 

Execution Strategy, prioritization of project tasks, schedule performance, contract administration, 

and performance monitoring.” 

348. On November 28, 2016, Santee Cooper’s CEO sent an e-mail to Marsh regarding 

the overall management of the nuclear expansion project.  Byrne received a copy of the e-mail as 

well.  In the e-mail, Santee Cooper’s CEO expressed “frustration” at the lack of “project 

management expertise in large scale EPC construction.”  Santee Cooper’s CEO stated, similar to 

what Bechtel had found, that SCANA did not have the expertise necessary to oversee a mega-

project like the V.C. Summer expansion. 

349. In addition, Santee Cooper’s CEO indicated in his e-mail that he wanted to release 

publicly Bechtel’s Final Report. 

350. A week after the CORB debriefed SCANA’s senior management, the PSC 

approved SCANA’s petition to adopt the fixed price option and make August 2019 and August 

2020 the substantial completion dates for Unit 2 and Unit 3.  The PSC specifically referred to 

Byrne’s testimony in concluding that the revised completion dates were “reasonable forecasts of 

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the time required for completing the Units and supported by the evidence of record in this 

proceeding.” 

351. Between the time SCANA filed the petition on May 26, 2016, and the PSC’s ruling 

on November 28, 2016, however, SCANA and its senior executives failed to correct their false and 

misleading statements regarding the reliability of the construction schedule and the likelihood of 

receiving the federal tax credits.  To the contrary, they repeatedly touted the unrealistic completion 

dates and the production tax credits that SCANA was not going to receive at the current rate of 

progress on the project. 

352. On December 15, 2016, Byrne attended another meeting with Santee Cooper and 

Westinghouse to discuss the expansion project.  At the meeting, a Santee Cooper executive 

expressed concern about the lack of progress each month and stated:  “if you do the math it’s 

hard to see that we are going to get there.”  [Emphasis added]. 

353. Byrne’s own handwritten notes from the meeting expressed the same sentiment:  

“Doesn’t seem to be plan to improve % complete – Need 2x-3x.”  In other words, Westinghouse 

would need to double or triple the rate of progress on the project to meet the deadlines in the 

schedule, which is something Westinghouse had been unable to do during the multi-year project. 

354. SCANA nevertheless continued issuing press releases that touted progress being 

made on the project.  For example, on December 19, 2016, SCANA published a press release 

entitled, “SCE&G Sets 2.4 Million Pound Module for V.C. Summer Unit 3.”  In the press release, 

SCANA stated:  “To see this nuclear construction milestone and more, visit SCE&G on Flickr and 

YouTube.” 

355. On December 27, 2016, Westinghouse’s parent company, Toshiba Corporation, 

publicly announced that the cost to complete the nuclear expansion project would far surpass the 

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original estimates. 

356. That same day, Marsh participated in a call with Westinghouse regarding the 

project.  Marsh wrote in his notes from the call:  “Schedules unrealistic.”  [Emphasis added]. 

357. On December 29, 2016, Byrne and Santee Cooper’s Senior Vice President for 

Nuclear Energy met with a representative from Westinghouse’s sub-contractor (Fluor) at a coffee 

shop.  According to the Santee Cooper executive’s notes from the meeting, Westinghouse’s sub-

contractor stated that Westinghouse was still using mandatory constraints to hold the schedule to 

artificial completion dates.  In other words, Westinghouse would not allow its sub-contractor to 

create a re-baselined schedule to determine when the new units would actually be completed.  This 

is essentially what Bechtel had noted more than a year earlier.  Marsh received a copy of the 

Santee Cooper executive’s notes from the meeting a few days later. 

358. On January 4, 2017, Marsh and Byrne received an e-mail from Santee Cooper’s 

CEO that included a list of “proposed issues” to raise at a planned meeting with Westinghouse on 

January 6, 2017.  In terms of the construction schedule, Santee Cooper’s CEO wrote:  “Current 

production factors, which are in decline, render meeting the stated project schedule an 

impossibility.”  [Emphasis added]. 

359. On January 6, 2017, SCANA’s senior management, including Marsh and Byrne, 

attended the meeting with Santee Cooper and Westinghouse to discuss the deteriorating status of 

the expansion project.  According to Byrne’s notes, Marsh asked, “How did we get here?”  Marsh 

went on to recognize that the schedule has “a lot more risk in it” than previously acknowledged 

publicly and that Westinghouse’s sub-contractor estimates additional delays.  Santee Cooper’s 

CEO observed that it would be a “disaster” to send their regulator a schedule that “is 

unbelievable.”  Marsh’s own notes reflect that Westinghouse “did not confirm 2020,” meaning that 

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Westinghouse did not commit to completing the new nuclear units in time for SCANA to qualify 

for the production tax credits. 

360. Five days later, on January 11, 2017, SCANA published another misleading press 

release entitled, “SCE&G Places First AP1000 Steam Generator in the U.S.”  In the press release, 

SCANA touted progress being made on the expansion project and directed investors to the website, 

www.scana/com/investors/nuclear-development, to “see this nuclear construction milestone and 

more[.]”    

361. On February 14, 2017, SCANA issued a press release stating that Westinghouse 

and its parent company, Toshiba, “are committed to completing the two new” nuclear units “being 

constructed in Jenkinsville, SC.”  SCANA also misleadingly stated that Westinghouse provided it 

with “revised in-service dates of April 2020 and December 2020 for Units 2 and 3, respectively,” 

and that the revised schedule “would enable both units to qualify . . . for the federal production tax 

credits.”  SCANA and its senior executives knew that this revised schedule was not realistic.  The 

same day, SCANA filed a Form 8-K with the SEC providing the same misleading information. 

362. Two days later, on February 16, 2017, Byrne and Marsh participated in SCANA’s 

fourth quarter earnings call.  According to SCANA’s Chief Financial Officer, it was important for 

SCANA’s CEO (Marsh) to be on the call because of the “severity of the situation.” 

363. On the call, Byrne sought to assuage concerns regarding the continued viability of 

the project.  Byrne misleadingly described progress being made on the project and referred to 

photographs of the construction site to show work that had been completed.  Byrne misleadingly 

stated:  “As you can see, we’ve made significant progress in just under 14 months.”  Byrne failed 

to disclose that the project had fallen even further behind schedule during the past year. 

364. Byrne also provided false and misleading information about the status of the project 

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schedule and the receipt of production tax credits when he answered questions from analysts.  For 

example, Byrne had the following discussion with one analyst: 

 Analyst:   When do you have to get them in service to ensure you qualify both for 

the production tax credits and for bonus depreciation?  And does that date differ for 

either of those? 

 Byrne:     Well, Michael, this is Steve.  For the production tax credit basis, we have 

to have them operating by 2021. 

       **** 

 Analyst:   Okay.  So in the situation, they’re already pushing Unit 3 out, assuming 

be [sic] schedule they submitted holds and what’s in the BLRA filing, assuming 

Unit 3 is December 2020,  if that pushes out another couple of months, sometime 

between now and then, it’s conceivable that unit wouldn’t qualify for PTC? 

 Byrne:    That possibility exists.  There are a couple things that are yet undefined 

relative to – or untested relative to qualification for production tax credits.  One is, 

what is the definition of in service, because certainly we’ll be making some power 

from those units prior to declaring it in service.  So if making power qualifies, then 

we’ll be ahead of those dates.  So that just gives us a little bit more room on the 

order of two months. 

365. Byrne had the following discussion with another analyst: 

 Analyst:   Okay.  It doesn’t sound like any of this stuff is insurmountable.  It sounds 

like blocking and tackling.  So am I correct in assuming that you guys feel like 

efficiency improvements are readily achievable? 

 Byrne:      Yes.  I think the improvements that they’ve laid out to us.  Now, they’ve 

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got to go out and get the expertise they’re talking about.  I know they’re at it right 

now.  They’re looking at all kinds of options, and we are encouraging [sic] to 

include all kinds of options, including the possibility that we’ll have Toshiba 

resources on the site.” 

366. Another analyst asked Byrne:  “Given the new timelines released, obviously, 

recently what’s your level of confidence against these timelines, particularly given some of the 

risks around further delay on the second [new] unit [Unit 3]?  Do you have any sense on that?” 

367. Byrne responded:  “Yes.  So what we’ve seen so far is that the efficiency factors 

have increased significantly on Unit 3, our second new unit.  In some cases it’s a matter of hours, 

in other cases, it’s double or triple the efficiency factor for the second unit . . . and it’s going much, 

much more smoothly.  So I have reasonable confidence in the efficiency gains for the second new 

unit.”  By “efficiency gains,” Byrne was referring to improving the rate of construction for Unit 3.  

Byrne failed to disclose, however, that Unit 3 still would not be completed in time to qualify for 

the production tax credits.   

368. Marsh did not correct any of Byrne’s false and misleading statements on the call.  

Instead, Marsh also sought to reassure investors by misleadingly stating that “we still anticipate 

completing our two new nuclear units, which will enable us to provide our customers with safe, 

reliable energy for decades to come. . . . As you can see from Steve [Byrne’s] update, we are 

making substantial progress on these new plants and remain focused on continued progress toward 

their completion.” 

369. SCANA posted the transcript from the earnings call on its website along with a 

PowerPoint presentation that included “revised in-service dates” of “April 2020 and December 

2020 for Unit 2 and Unit 3, respectively.”  In addition, investors were allowed to listen to the call. 

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370. On February 24, 2017, SCANA filed a Form 10-K with the SEC that failed to 

disclose the true status of the expansion project. 

371. SCANA’s Form 10-K misleadingly stated:  “Based on current tax law and the 

contractual guaranteed substantial completion dates (and the recently revised forecasted dates of 

completion) provided above [April 2020 and December 2020], both New Units would be 

operational and would qualify for the nuclear production tax credits; however, any further delays 

in the schedule or changes in tax law could adversely impact these conclusions.” 

372. SCANA’s Form 10-K omitted a fair and full description of the status of the nuclear 

expansion project, including the unreliability of the schedule and the serious doubts about the new 

units qualifying for the production tax credits. 

373. In accordance with Rule 13a-14 of the Exchange Act and Section 304 of the 

Sarbanes-Oxley Act, Marsh certified that he had reviewed the periodic filing and that it contained 

no untrue statements.  Marsh knew, however, that his certification was false and misleading. 

374. Byrne also knew that the information in SCANA’s periodic filing was false and 

misleading.  Nevertheless, on February 24, 2017, Byrne signed a sub-certification letter in 

connection with the filing that falsely stated he had “no knowledge of any fraud or suspected fraud 

affecting SCANA or SCE&G[.]”  SCANA required this sub-certification before filing the Form 

10-K. 

Defendants Continue Making False and Misleading 
Statements as SCANA Abandons the Project 
 
375. On March 29, 2017, Westinghouse filed for bankruptcy. 

376. That same day, Marsh and Byrne spoke on an analyst call regarding the project and 

Westinghouse’s bankruptcy announcement.  Marsh began by falsely stating:  “We’ve been 

transparent on this project since day one and we’re not going to change that.” 

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377. Marsh went on to say that work would continue on the project during a 30-day 

transition and evaluation period and that “construction at the site will continue toward completion 

of the units, with approximately 5,000 workers on site daily.”  Marsh also stated that “[a]t this 

time, we expect that the resources available from Westinghouse and Toshiba, including its parental 

guarantee, are adequate to compensate us for the Westinghouse estimate of additional cost.” 

378. On the call, Byrne also falsely stated that going forward productivity should 

increase at the construction site and that there was “no change” to the latest schedule, even though 

Byrne knew that the schedule was unreliable and the lead contractor was entering bankruptcy. 

379. Two weeks later, on April 12, 2017, Marsh and Byrne provided an ex parte briefing 

to the PSC.  Marsh and Byrne both sought to allay concerns over the continued viability of the 

project.  In particular, Byrne testified that “in spite of the bankruptcy, work continues on-site 

without substantial disruption.” 

380. Marsh and Byrne also told the PSC that SCANA was evaluating how to proceed, 

including whether to complete both new nuclear units, complete only one of the new nuclear units, 

or abandon the project. 

381. On April 27, 2017, Byrne participated in SCANA’s first quarter earnings call.  

Byrne spoke about progress being made on the project, referring to several photographs of the 

construction site to show Unit 2 and Unit 3 being closer to completion, and he noted that 

“productivity is largely unchanged.”  Byrne reiterated that they thought the cost to complete Unit 2 

and Unit 3 would be covered by Westinghouse and Toshiba (through its parental guarantee).  

Byrne also noted that SCANA planned to extend its evaluation period by an additional sixty days. 

382. SCANA posted the transcript from the earnings call on its website.  In addition, 

investors were allowed to listen to the call. 

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383. Based on its evaluation of the project, SCANA determined that it would take 

several more years and require substantial additional funding to complete Unit 2 and Unit 3.  

SCANA also determined that neither new nuclear unit would be completed in time to qualify for 

the production tax credits. 

384. On July 12, 2017, Santee Cooper’s Senior Vice President for Nuclear Energy sent a 

letter to Byrne that expressed “significant concerns with the estimate” for completing the project.  

Specifically, Santee Cooper thought that even SCANA’s revised estimated cost and completion 

schedule “could be understated by an order of magnitude – one billion dollars low and 18 months 

short[.]”  In sum, Santee Cooper thought that SCANA’s cost and schedule estimates were 

“unrealistic.”  Marsh and Byrne received a copy of the letter on July 13, 2017. 

385. On July 31, 2017, SCANA announced that it was abandoning the nuclear expansion 

project at V.C. Summer.  SCANA publicly stated that even if the project went forward Unit 2 

would not be in service until December 2022 and Unit 3 would not be in service until March 2024 

– i.e., years after the deadline for receiving the production tax credits.  In addition, SCANA 

announced that the cost of completing the new nuclear units “materially exceeded” the amount of 

Toshiba’s parental guarantee and the amount authorized by the PSC. 

386. On August 1, 2017, SCANA filed a petition with the PSC in which the company 

announced its intention to abandon the project.  In its petition, SCANA stated that it would cost 

$8.8 billion to complete the new nuclear units, and that Unit 2 would not be complete until 

December 31, 2022, and Unit 3 would not be complete until March 31, 2024.  In its petition, 

SCANA requested that the PSC find its decision to abandon the project to be “reasonable and 

prudent.” 

387. On August 1, 2017, Marsh and Byrne testified before the PSC.  Byrne inexplicably 

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claimed that “[t]he construction work at the site has been progressing well,” even though the 

project had essentially collapsed.  Later in his testimony, however, Byrne acknowledged that 

neither Unit 2 nor Unit 3 would be completed before the January 1, 2021 deadline for receiving the 

production tax credits. 

388. In September 2017, the Governor of South Carolina – who had obtained a copy of 

Bechtel’s Final Report from Santee Cooper – ordered that Bechtel’s Final Report be made public.  

The report was made publicly available over the objection of SCANA. 

389. Later in September 2017, SCANA’s senior management, including Marsh and 

Byrne, testified before the South Carolina House Utility Ratepayer Protection Committee.  Marsh 

and Byrne acknowledged in their testimony that the concerns raised by Bechtel in October 2015 

had also been raised internally by SCANA’s nuclear team.  Yet, neither Marsh nor Byrne publicly 

disclosed that information in 2015 or 2016.  To the contrary, Marsh and Byrne consistently 

contradicted those findings in their public statements about the project.  Even in September 2017, 

Marsh and Byrne misleadingly claimed that SCANA would still be building Unit 2 and Unit 3 if 

Westinghouse had not declared bankruptcy.  In fact, SCANA and its senior management, including 

Marsh and Byrne, knew before Westinghouse declared bankruptcy that the project schedule was 

unreliable and that the new nuclear units would not be completed in time to qualify for the 

production tax credits. 

390. In addition, Marsh falsely testified before the South Carolina Senate’s Nuclear 

Project Review Committee that the schedule SCANA submitted to the PSC “was appropriate based 

on the facts we knew at the time” and that SCANA “never gave [the PSC] a schedule that we 

didn’t believe in.” 

391. At around this time, SCANA’s market capitalization had decreased to 

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approximately $7 billion. 

392. SCANA’s false and misleading statements regarding the nuclear expansion project 

at V.C. Summer caused substantial losses to SCANA’s investors and customers.  Investors were 

misled about the true status of the project at the time they invested in SCANA.  These investors 

lost hundreds of millions of dollars as a result of SCANA’s fraud.  In addition, SCANA’s energy 

customers lost well over $1 billion in higher rates that SCANA had been allowed to charge them to 

help recoup the significant financing costs associated with the project. 

393. Marsh and Byrne both resigned from SCANA at the end of 2017. 

394. On January 14, 2019, the PSC ruled that SCANA had acted imprudently from 

March 12, 2015 forward by misleading the PSC, ORS, the public, and investors regarding the 

true condition of the V.C. Summer expansion project and by failing to disclose the existence and 

content of the Bechtel assessment. 

395. The new nuclear units at V.C. Summer remain unfinished. 

COUNT I – FRAUD 
 

Violations of Section 17(a)(1) of the Securities Act 
[15 U.S.C. § 77q(a)(1)] 

(Against All Defendants) 
 

396. Paragraphs 1 through 395 are re-alleged and incorporated herein by reference. 

397. Defendants, acting with scienter, in the offer or sale of securities and by the use of 

means or instruments of transportation or communication in interstate commerce or by the use of 

the mails, directly or indirectly, employed a device, scheme, or artifice to defraud. 

398. By reason of the foregoing, Defendants, directly and indirectly, have violated and, 

unless enjoined, will continue to violate Section 17(a)(1) of the Securities Act [15 U.S.C. 

§ 77q(a)(1)]. 

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COUNT II – FRAUD 
 

Violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act 
[15 U.S.C. §§ 77q(a)(2) and (3)] 

(Against All Defendants) 
 

399. Paragraphs 1 through 395 are re-alleged and incorporated herein by reference. 

400. Defendants, acting knowingly, recklessly, or negligently in the offer or sale of 

securities and by the use of means or instruments of transportation or communication in interstate 

commerce or by the use of the mails, directly or indirectly, (a) obtained money or property by 

means of untrue statements of material fact or by omitting to state material facts necessary in order 

to make the statements made, in light of the circumstances under which they were made, not 

misleading; and (b) engaged in transactions, practices, or a course of business which operated or 

would have operated as a fraud or deceit upon the purchaser. 

401. By reason of the foregoing, Defendants, directly and indirectly, have violated and, 

unless enjoined, will continue to violate Sections 17(a)(2) and 17(a)(3) of the Securities Act [15 

U.S.C. §§ 77q(a)(2) and 77q(a)(3)]. 

COUNT III – FRAUD 

Violations of Section 10(b) of the Exchange Act 
and Rules 10b-5(a), (b), and (c) thereunder 

[15 U.S.C. § 78j(b), 17 C.F.R. §§ 240.10b-5(a), (b), and (c)] 
(Against All Defendants) 

 
402. Paragraphs 1 through 395 are re-alleged and incorporated by reference herein. 

403. Defendants, acting with scienter and in connection with the purchase or sale of 

securities and by the use of any means or instrumentality of interstate commerce or by use of the 

mails or any facility of any national securities exchange, directly or indirectly, (a) employed a 

device, scheme, and artifice to defraud; (b) made untrue statements of material fact or omitted to 

state material facts necessary in order to make the statements made, in light of the circumstances 

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83 
 

under which they were made, not misleading; and (c) engaged in acts, practices, or a course of 

business which operated or would have operated as a fraud or deceit upon sellers, purchasers, or 

prospective purchasers of securities. 

404. By engaging in the conduct described above, Defendants violated, and unless 

enjoined will continue to violate, Section 10(b) of the Exchange Act and Rule 10b-5(a), (b), and (c) 

thereunder [15 U.S.C. § 78j(b), 17 C.F.R. § 240.10b-5]. 

COUNT IV – AIDING AND ABETTING (FRAUD) 

Aiding and Abetting Violations of Section 17(a) of the Securities Act 
[15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act 

[15 U.S.C. § 78j(b)], and Rules 10b-5(a), (b), and (c) thereunder 
[17 C.F.R. §§ 240.10b-5(a), (b), and (c)] 
(Against Defendants Marsh and Byrne) 

 
405. Paragraphs 1 through 395 are re-alleged and incorporated by reference herein. 

406. As alleged above, SCANA violated Section 17(a) of the Securities Act [15 U.S.C. 

§ 77q(a)] and Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rules 10b-5(a), (b), and 

(c) thereunder [17 C.F.R. §§ 240.10b-5(a), (b), and (c)]. 

407. Defendants Marsh and Byrne knew, or recklessly disregarded, that SCANA’s 

conduct was improper and knowingly rendered to SCANA substantial assistance in its illegal 

conduct as described above. 

408. By reason of the foregoing, Defendants Marsh and Byrne aided and abetted 

violations of and, unless enjoined, will continue to aid and abet violations of Section 17(a) of the 

Securities Act [15 U.S.C. § 77q(a)], Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and 

Rules 10b-5(a), (b), and (c) thereunder [17 C.F.R. §§ 240.10b-5(a), (b), and (c)]. 

COUNT V – REPORTING PROVISIONS VIOLATIONS 
 

Violations of Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)] 
and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder [17 C.F.R. §§ 240.12b-20, 

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84 
 

240.13a-1, 240.13a-11, and 240.13a-13] by SCANA and SCE&G, 
and Aided and Abetted by Marsh 

(Against Defendants SCANA Corporation, SCE&G, and Marsh) 
 

409. Paragraphs 1 through 395 are re-alleged and incorporated herein by reference. 

410. Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)] and Rules 12b-20, 13a-1, 

13a-11, and 13a-13 thereunder [17 C.F.R. § 240.12b-20, 240.13a-1, 240.13a-11, and 240.13a-13], 

require issuers of registered securities to file with the Commission factually accurate quarterly, 

annual, and current reports. 

411. As described above, Defendants SCANA and SCE&G violated, and unless enjoined 

will continue to violate, Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 

13a-13 thereunder, by filing quarterly, annual, and current reports that were materially false and 

misleading, and failed to include, in addition to the information expressly required to be stated in 

such reports, such further information as was necessary to make the statements made, in light of the 

circumstances in which they were made, not misleading. 

412. Defendant Marsh aided and abetted SCANA Corporation’s and SCE&G’s violations 

of Section 13(a) and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder by knowingly or 

recklessly providing substantial assistance to SCANA Corporation and SCE&G in its violations of 

those provisions, and unless enjoined Defendant Marsh will continue to aid and abet violations of 

Section 13(a) and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. 

COUNT VI – FALSE CERTIFICATIONS 
 

Violations of Exchange Act Rule 13a-14 [17 C.F.R. § 240.13a-14] 
(Against Defendant Marsh) 

 
413. Paragraphs 1 through 395 are re-alleged and incorporated herein by reference. 

414. Exchange Act Rule 13a-14 requires an issuer’s principal executive and financial 

officer to certify in each quarterly and annual report filed or submitted by the issuer under Section 

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13(a) of the Exchange Act that:  (1) they have reviewed the report; and (2) based on their 

knowledge, the report does not contain any untrue statement of material fact, or omit to state a 

material fact necessary in order to make the statements made, in light of the circumstances under 

which such statements were made, not misleading with respect to the period covered by the report. 

415. Marsh signed and submitted the required certifications in this case in connection 

with SCANA Corporation’s and SCE&G’s filings with the Commission as described above.  

Marsh’s certifications, however, contained untrue statements of material fact and also omitted to 

state material facts necessary to make the statements he made therein not misleading. 

416. By reason of the foregoing, Marsh violated and, unless enjoined, will continue to 

violate Exchange Act Rule 13a-14 [17 C.F.R. § 240.13a-14]. 

PRAYER FOR RELIEF 

 The Commission respectfully requests that this Court: 

1. Find that Defendants committed the violations alleged herein; 

2. Permanently enjoin Defendants and each of their agents, employees, and 

attorneys, and any other person or entity in active concert or participation with him who receives 

actual notice of the injunction by personal service or otherwise, from directly or indirectly 

engaging in conduct in violation of, as appropriate, Section 17(a) of the Securities Act [15 U.S.C. 

§ 77q(a)]; Section 10(b) of the Exchange Act and Rule 10b-5 thereunder [15 U.S.C. § 78j(b) and 

17 C.F.R. § 240.10b-5]; and Section 13(a) of the Exchange Act [15 U.S.C. § 78m(a)] and Rules 

12b-20, 13a-1, 13a-11, 13a-13, and 13a-14 thereunder [17 C.F.R. § 240.12b-20, 240.13a-1, 

240.13a-11, 240.13a-13, and 240.13a-14]. 

3. Order Defendants to disgorge all ill-gotten gains in the form of any benefits of 

any kind derived from the illegal conduct alleged in this Complaint, plus pay prejudgment 

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interest; 

4. Order Defendants to pay civil penalties pursuant to Section 20(d) of the Securities 

Act [15 U.S.C. § 77t(d)] and Section 21(d) of the Exchange Act [15 U.S.C. § 78u(d)] in an 

amount to be determined by the Court; 

5. Issue an Order pursuant to Section 20(e) of the Securities Act [15 U.S.C. 

§ 77t(e)], Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)], Section 21(d)(5) of the 

Exchange Act [15 U.S.C. § 78u(d)(5)], and the inherent equitable powers of this Court, 

prohibiting Defendants Marsh and Byrne from acting as an officer or director of any issuer 

whose securities are registered with the Commission pursuant to Section 12 of the Exchange Act 

or which is required to file reports with the Commission pursuant to Section 15(d) of the 

Exchange Act; 

6. Retain jurisdiction of this action in accordance with the principles of equity and 

the Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders 

and decrees that may be entered, or to entertain any suitable application or motion by the 

Commission for additional relief within the jurisdiction of this Court; and 

7. Order such other and further relief as this Court may deem just, equitable, and 

appropriate in connection with the enforcement of the federal securities laws and for the 

protection of investors. 

JURY TRIAL DEMAND 

The Commission demands a trial by jury on all issues that may be so tried. 

 

Dated: February 27, 2020  Respectfully submitted, 

     Nathan S. Williams 
Attorney for the United States 

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Acting Under Authority Conferred by 28 U.S.C. § 515 
 
By:  /s/ Beth C. Warren     
JAMES LEVENTIS (#9406) 
BETH C. WARREN (#11360) 
Assistant United States Attorneys 
1441 Main Street, Suite 500 
Columbia, South Carolina 29201 
Telephone (803) 929-3037 
E-mail: [email protected] 

      
     M. Graham Loomis* 
     Harry B. Roback* 
     John O’Halloran* 
     U.S. Securities and Exchange Commission 
     950 East Paces Ferry Road, NE, Suite 900 
     Atlanta, GA 30326 
     (404) 942-0690 (Roback) 
     [email protected] 
 
     *Application for admission pro hac vice forthcoming 

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