FirstEnergy To Pay Penalty Of $230 Mln To Settle U.S. Justice Department Investigation

(RTTNews) - FirstEnergy Corp. (FE) said that it has reached a deal with the U.S. Attorney's Office for the Southern District of Ohio to resolve the previously disclosed investigation. The deferred prosecution agreement has been filed in federal court.

As per the three-year deferred prosecution agreement, FirstEnergy has agreed to pay a penalty of $230 million, and has agreed to the government's filing of a single charge of conspiracy to commit honest services wire fraud. The charge will be dismissed, provided FirstEnergy abides by all terms of the agreement.

FirstEnergy noted that the payment of the $230 million fine will be split equally between the U.S. Treasury and the Ohio Development Service Agency for the benefit of Ohio utility customers.

The company expects to record a charge in this amount for the second quarter this year.

FirstEnergy said it has taken substantial remedial actions across four broad categories, including employment consequences for executives and employees who engaged in misconduct; enhancements to the company's compliance program; improvements to the company's policies and procedures; and monetary remediation to ratepayers.

The company said it will establish an executive director role for the Board of Directors, which supports the development of enhanced controls and governance policies and procedures.

The company will hire a new chief legal officer, who oversees the company's legal and internal audit departments.

The company will separate the chief legal officer and chief ethics and compliance officer functions, and hire a new CECO who reports directly to the Audit Committee of the Board and administratively to the chief legal officer.