Edison International

Case Details

Case Summary

Throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company failed to maintain electricity transmission and distribution networks in compliance with safety requirements and regulations promulgated under state law; (ii) consequently, the Company was in violation of state law and regulations; (iii) the Company's noncompliant electricity networks created a significantly heightened risk of wildfires in California; and (iv) as a result, the Company's public statements were materially false and misleading at all relevant times. On November 8, 2018, two wildfires started in Southern California, designated the Hill Fire and the Woolsey Fire. The Hill Fire, which broke out in Ventura County, subsequently grew to 4,531 acres, according to the California Department of Forestry and Fire Protection ("Cal Fire"). Stretching from Los Angeles County to Ventura County, the Woolsey Fire burned 93,662 acres, including 83 percent of all National Parks Service land in the Santa Monica Mountains National Recreation Area, according to Cal Fire. On November 12, 2018, the California Public Utilities Commission ("CPUC") launched an investigation into Edison's subsidiary SCE, in order to "assess the compliance of electrical facilities with applicable rules and regulations in fire-impacted areas." According to CPUC, electrical infrastructure may have suffered malfunctions near ground zero of the blazes. Specifically, it was reported that on the day the fires began SCE issued an alert to the CPUC that a substation circuit near the Woolsey Fire origin "relayed," or sensed a disturbance on the circuit, just two minutes before Cal Fire said that the devastating fire began. Following CPUC's announcement, Edison International's stock price fell $7.44 per share, or more than 12%, to close at $53.56 per share on November 12, 2018. Over the following days, as the Hill and Woolsey Fires continued to burn, Edison International's stock price continued to fall, closing at $47.19 on November 15, 2018, a total drop of 32% from its price prior to CPUC's announcement.