Norfolk Southern, a transportation company, is facing legal action for allegedly violating federal securities laws by making false and misleading statements about its business operations and prospects. As a result, the company’s investors have suffered significant losses. The company has been accused of putting profits and executive compensation above safety, including adopting a system that incentivizes executives to cut costs at the expense of safety. The company has also been linked to the repeal of an Obama-era safety rule.
On February 3, 2023, a Norfolk Southern freight train derailed in Ohio, causing a significant amount of damage and releasing hazardous materials into the air and water of nearby residential areas. This led to a decrease in the company’s stock price. Ohio Governor Mike DeWine has stated that Norfolk Southern is liable for the harm caused and should pay for it.
Subsequent reports and statements from public officials about Norfolk Southern’s liability for the incident have caused the company’s stock price to continue to drop. On March 4, 2023, another Norfolk Southern freight train derailed, prompting the company to announce a plan to improve operational safety. However, this did not prevent a further drop in the company’s stock price.