SEC Charges Exelon, its Subsidiary Commonwealth Edison, and Subsidiary’s Former CEO Anne Pramaggiore with Fraud in Connection with Political Corruption Scheme

The Securities and Exchange Commission (SEC) has taken legal action against Exelon Corporation, its subsidiary Commonwealth Edison Company (ComEd), and former ComEd CEO Anne Pramaggiore, unveiling charges related to a lengthy and corrupt scheme aimed at influencing and rewarding then-Speaker of the Illinois House of Representatives, Michael Madigan. While Exelon and ComEd have agreed to settle the charges, with Exelon agreeing to pay a civil penalty of $46.2 million, the charges against Anne Pramaggiore will be subject to litigation.

According to the SEC’s order against Exelon and ComEd, between 2011 and 2019, ComEd orchestrated a series of arrangements to provide jobs, subcontracts, and monetary payments to associates connected to Michael Madigan. The primary objective of these actions was to exert influence over Madigan with regard to legislation that would benefit ComEd. The order reveals that ComEd facilitated payments to Madigan’s associates through third-party vendors in an attempt to obscure the extent of these payments. This allowed ComEd to distance itself from any oversight of Madigan’s associates, despite the fact that, in some instances, these individuals contributed little or nothing to the work for which they were hired. The order further notes that ComEd made indirect payments totaling more than $1.3 million to Madigan’s associates. In a deferred prosecution agreement reached with criminal authorities, ComEd acknowledged that Madigan’s support for legislation favorable to the company resulted in anticipated benefits exceeding $150 million.

The SEC’s complaint against Anne Pramaggiore alleges her direct involvement in and, at times, direction of the bribery scheme. The complaint asserts that Pramaggiore failed to disclose the bribery scheme and instead misrepresented ComEd’s lobbying activities to investors as legitimate. Additionally, the complaint alleges that, as part of the scheme, Pramaggiore provided false information to Exelon’s auditors and filed inaccurate certifications.

LeeAnn G. Gaunt, Chief of the SEC Enforcement Division’s Public Finance Abuse Unit, emphasized the significance of transparency in corporate communications, stating, “Pramaggiore’s remarks to investors about ComEd’s lobbying efforts hid the reality of the long-running political corruption scheme in which they were engaged. When corporate executives speak to investors, they must not mislead by omission.”

Exelon and ComEd have agreed to the SEC’s cease-and-desist order, acknowledging their violation of antifraud, books and records, and internal accounting controls provisions of federal securities laws. As part of the settlement, Exelon has consented to pay a civil penalty of $46.2 million.

The SEC’s complaint against Anne Pramaggiore contends that she violated antifraud, books and records, and internal accounting controls provisions of federal securities laws. Additionally, it asserts that she aided and abetted Exelon’s and ComEd’s violations of books and records and internal accounting controls provisions. The SEC seeks permanent injunctive relief, disgorgement along with prejudgment interest, a civil penalty, and an officer and director bar against Pramaggiore.

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