NuScale Power Faces SEC Probe Amid Investor Concerns
Portland, Wednesday, 4 September 2024.
NuScale Power, a nuclear technology firm, is under investigation by the SEC for potential securities fraud. The probe follows concerns about risk mitigation plans and has led to a significant drop in stock price, prompting law firms to investigate on behalf of investors.
Background of the Investigation
NuScale Power Corporation, based in Oregon, is currently facing a wave of scrutiny from both the U.S. Securities and Exchange Commission (SEC) and several prominent law firms. On July 29, 2024, Hunterbrook Media reported that the SEC’s Division of Enforcement has launched an ‘active and ongoing’ investigation into the company’s financial practices and disclosures. The investigation was triggered by concerns raised by the U.S. Nuclear Regulatory Commission (NRC) regarding the company’s risk mitigation strategies for one of its reactor designs.[1][3]
Market Reaction and Investor Concerns
The news of the SEC’s investigation had immediate repercussions on NuScale’s market performance. The company’s stock price plummeted by $1.35, representing a 12.44% decline, to close at $9.50 per share on the same day the investigation was announced. This significant drop in stock value has alarmed investors, prompting further scrutiny from law firms specializing in securities fraud and corporate litigation, such as Pomerantz LLP and Hagens Berman Sobol Shapiro LLP.[1][2][3]
Legal Actions and Investigations
Pomerantz LLP, a New York-based law firm with additional offices in Chicago, Los Angeles, London, Paris, and Tel Aviv, has a history of over 85 years in securities fraud litigation. The firm is now investigating claims on behalf of NuScale investors to determine if the company engaged in misleading practices or unlawful business activities. Hagens Berman Sobol Shapiro LLP is also investigating, urging investors who have suffered substantial losses to come forward with their claims. Reed Kathrein, a partner at Hagens Berman, emphasized the firm’s focus on evaluating the propriety of NuScale’s financial disclosures and whether their employment agreements suppress whistleblowing.[1][2][3]
Operational and Financial Struggles
NuScale has faced operational and financial challenges over the past years. The company reported an operating loss of $41.9 million in Q2 2024, a reduction from the $56.1 million loss in Q2 2023, partly due to a 28% workforce reduction. Despite over 15 years of research and development, NuScale has yet to commercialize any reactors. The company’s most advanced project, a 462-MW nuclear facility in Romania, is still in the engineering and design phase, while their initial Carbon Free Power Project in the USA was canceled.[1][2][3]
Future Prospects and Company Statements
NuScale remains optimistic about its future despite the ongoing investigation. CEO John Hopkins highlighted that NuScale is the only Small Modular Reactor (SMR) certified by the U.S. Nuclear Regulatory Commission, positioning the company uniquely in the market for near-term deployment of carbon-free power solutions. The U.S. Department of Energy is expected to announce final award selections in mid-2025, and NuScale believes it is well-positioned to be a recipient or a recipient partner under these awards.[1][2][3]