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The Securities and Exchange Commission said on Thursday that two South Carolina companies and two former top executives face civil fraud charges in relation to a failed nuclear power plant expansion project, the Wall Street Journal reported. Scana Corp. and two of its former senior executives allegedly repeatedly made false and misleading statements to investors, regulators and consumers between 2015 and 2017 about the status of the $9 billion nuclear project that ultimately failed, the SEC said in a complaint filed in a federal court in South Carolina. The charges came after Cayce, S.C.-based Scana, the primary owner of the Virgil C. Summer power plant, abandoned the project of building two nuclear reactors in July 2017 after close to a decade of planning and construction, citing high construction costs and delays. The SEC also charged a Scana subsidiary, South Carolina Electric & Gas Co., which is now known as Dominion Energy South Carolina Inc. Dominion Energy Inc. acquired Scana in January 2019. The defendants claimed the project was on track even though they knew it was significantly delayed and wouldn’t be completed on time by Jan. 1, 2021, to qualify for $1.4 billion of federal tax credits, the securities regulator alleged.

Wells Fargo will pay a $35 million fine to settle accusations that it improperly recommended risky investments to some of its clients, including senior citizens and retirees, the Securities and Exchange Commission said yesterday, according to the Washington Post. These clients were encouraged to buy a risky version of an exchange-traded fund, known as an ETF, according to the SEC’s cease-and-desist order. These “single-inverse ETFs” use complex financial engineering to deliver big profits when stocks fall. But these types of ETFs can lead to devastating losses when held for more than a day and are traditionally recommended only for sophisticated investors. Wells Fargo recommended that some clients hold them for “months or years,” even though those clients had “moderate or conservative risk tolerances,” according to the SEC settlement. “Some of these clients had little or no relevant investing experience.”

The Securities and Exchange Commission (SEC) said yesterday that Steven Seagal, the former action-movie star turned would-be musician, will pay more than $300,000 to settle charges that he failed to disclose he was being paid to promote a cryptocurrency investment, the Washington Post reported. Seagal did not tell his millions of social media followers that Bitcoiin2Gen had promised him $250,000 in cash and $750,000 worth of its tokens before promoting its initial coin offering on Twitter and Facebook, according to the SEC. Under the settlement, Seagal agreed to pay the SEC more than $330,000 in penalties and interest, including $157,000 that Bitcoiin2Gen had already paid him. “These investors were entitled to know about payments Seagal received or was promised to endorse this investment so they could decide whether he may be biased,” Kristina Littman, chief of the SEC enforcement division’s cyber unit, said in a statement. In February 2018, Seagal posted a news release on Facebook, where he has 6.7 million followers, announcing he had become the company’s “brand ambassador,” according to the SEC settlement. He also congratulated the company on Twitter, where he has more than 100,000 followers, for reaching its financial goals.

The U.S. Securities and Exchange Commission is investigating a non-profit that defaulted on $170 million of municipal bonds issued to finance the acquisition of about 1,800 low-income apartments in Chicago and its suburbs, Bloomberg News reported. The disclosure of the investigation came in a court filing earlier this month by attorneys for the Better Housing Foundation. Lindran Properties LLC, a subsidiary of the foundation, filed for chapter 11 protection from creditors on Jan. 31. Clark Hill Plc, a law firm representing BHF in the bankruptcy, said that the non-profit received a subpoena from the SEC “seeking records related to the events that preceded current ownership’s involvement in BHF and its affiliates.” BHF was incorporated in 2015 by Meredith Rosenbeck, an attorney in a Columbus, Ohio, suburb, just one-year before it started borrowing through the Illinois Finance Authority to acquire the apartments in Chicago. The non-profit paid Chicago-based real estate investor L. Mark DeAngelis more than $4 million to acquire and manage three of the five portfolios of apartments, known as Shoreline, Icarus and Ernst, according to a lawsuit filed by BHF in October 2018.

The Securities and Exchange Commission’s top official overseeing credit-rating firms said that the agency is rethinking its post-crisis effort to improve the quality of bond ratings, a tacit acknowledgment that the decade-old program has been a failure, the Wall Street Journal reported. Jessica Kane, who heads the agency’s Office of Credit Ratings, said that the SEC is now seeking input on ways to limit the pressure firms such as S&P Global Inc. and Moody’s Corp. face to boost bond ratings. Bond issuers, which benefit from higher ratings, pay the ratings firms to grade the bonds. After the 2008 financial crisis, credit-rating firms were criticized for taking lucrative fees and giving high grades to risky securities that later caused big losses for investors. The Dodd-Frank Act’s financial overhaul in 2010 created the SEC’s Office of Credit Ratings to monitor ratings firms and perform annual examinations of their books and procedures. Kane said that her agency needs more authority to expand those examinations and asked Congress for a “statutory change” that would enable it to do so. After the financial crisis, the SEC didn’t end the practice of bond issuers hiring the firms that rate their offerings. Instead, the SEC decided to encourage ratings firms to publish unsolicited ratings on securities they weren’t hired to analyze. The agency crafted a rule to give them access to deal data to publish such ratings.

President Donald Trump pardoned Michael Milken almost exactly 30 years after the junk-bond king pleaded guilty to securities fraud, Bloomberg News reported. Milken’s rise behind an X-shaped desk in Beverly Hills was so sharp that it fueled the buyout boom and the reign of junk bonds, though his colleagues inside Drexel Burnham Lambert preferred the term high yield. His fall, culminating in 22 months in prison for illegal trades, was so steep that it helped turn him into a symbol for the avarice of an entire industry and era. The 73-year-old billionaire’s rescue by Trump was so astounding that Wall Street observers wondered if he would try to return to the securities industry that banned him for life. Around the time that Trump was trying to transform himself into a king of 1980s New York real estate, Milken was helping to turn junk bonds from a backwater of risky corporate debt into a trillion-dollar market. Those bonds let a ragtag group of corporate raiders borrow enough to take over some of America’s best-known companies, and Milken inspired Wall Street acolytes who stayed loyal well past Drexel’s bankruptcy — and his tearful apology in court for securities fraud.

Morningstar Inc. is nearing a deal with federal regulators over allegations the firm violated rules in its bond-rating business that prohibit analysts who hand out credit ratings from being involved in sales and marketing for their companies, the Wall Street Journal reported. The potential settlement with the Securities and Exchange Commission is an embarrassment for a firm that made its name analyzing mutual funds. Morningstar has made a big push into bond ratings, saying that it would improve quality and restore investor trust in the business, whose reputation was damaged in the financial crisis. Terms of the settlement, which could be announced as early as this week, weren’t known. The settlement involves Morningstar’s ratings on asset-backed securities, and the firm could be fined several million dollars. Asset-backed securities are bonds backed by monthly payments on auto loans, student loans, credit cards and the like.