Electric utility company Exelon and its subsidiary Commonwealth Edison agreed to pay $46.2 million as part of a settlement with the Securities and Exchange Commission (SEC) related to their Illinois bribery and lobbying scandal that previously earned ComEd a deferred prosecution agreement (DPA) with the Department of Justice (DOJ).
Exelon and ComEd were charged with fraud by the SEC for corruptly influencing former Illinois House Speaker Michael Madigan, which the companies admitted to in agreeing to pay $200 million as part of their settlement with the DOJ in 2020. The purpose of the bribes, which occurred between 2011 through 2019, was to influence and reward Madigan’s efforts to assist ComEd regarding legislation concerning the company and its business.
The details: Exelon and ComEd violated securities laws by failing to keep books, records, and accounts that accurately and fairly reflected transactions and dispositions of assets, according to the SEC’s order filed Thursday. The agency added the companies failed to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that assets were used and transactions executed in a manner consistent with their policies.
The SEC separately charged former ComEd Chief Executive Anne Pramaggiore with fraud for her role in the scandal. The lawsuit, filed in U.S. District Court for the Northern District of Illinois, seeks permanent injunctive relief, disgorgement plus prejudgment interest, a civil penalty, and an officer-and-director bar.
Compliance considerations: ComEd fulfilled all the obligations of its DPA, the term of which ended in July.
The SEC acknowledged Exelon and ComEd’s “significant remedial measures” to enhance their compliance program.
Company response: “This investigation, and the resulting settlement, were based entirely upon the past conduct outlined in the DPA, which Exelon has taken significant effort to address,” the company said in an emailed statement. “… As previously shared, since the conduct giving rise to the DPA and the SEC investigation, Exelon has substantially enhanced its compliance program and corporate governance by putting in place additional policies, controls, oversight, and employee training aimed at preventing the prior conduct from happening again.”