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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO

DIANA NICKERSON, Individually and On
Behalf of All Others Similarly Situated,

Case No:
CLASS ACTION COMPLAINT FOR
VIOLATIONS OF THE FEDERAL
SECURITIES LAWS

Plaintiff,
v.

JURY TRIAL DEMANDED
AMERICAN ELECTRIC POWER
COMPANY, INC., NICHOLAS K. AKINS,
BRIAN X. TIERNEY, and JOSEPH M.
BUONAIUTO,
Defendants.

Plaintiff Diana Nickerson (“Plaintiff”), individually and on behalf of all other persons
similarly situated, by Plaintiff’s undersigned attorneys, for Plaintiff’s complaint against
Defendants (defined below), alleges the following based upon personal knowledge as to Plaintiff
and Plaintiff’s own acts, and information and belief as to all other matters, based upon, inter alia,
the investigation conducted by and through his attorneys, which included, among other things, a
review of the Defendants’ public documents, announcements made by Defendants, public filings,
wire and press releases published by and regarding American Electric Power Company, Inc.
(“AEP” or the “Company”), information readily obtainable on the Internet such as media reports
about the Company, and filings in the following criminal cases: USA v. Generation Now, 1:20MJ-00522 (S.D. Oh.); USA v. Cespedes, 1:20-MJ-00523 (S.D. Oh.); USA v. Longstreth, 1:20-MJ00524 (S.D. Oh.); USA v. Householder v. Householder, 1:20-MJ-00525 (S.D. Oh.); USA v.
Borges, 1:20-MJ-00526 (S.D. Oh.); and USA v. Clark, 1:20-MJ-00527 (S.D. Oh.) (together the
“Criminal Proceedings”). Plaintiff believes that substantial evidentiary support will exist for the
allegations set forth herein after a reasonable opportunity for discovery.
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NATURE OF THE ACTION
1.

This is a class action on behalf of persons or entities who purchased publicly traded

AEP securities between November 2, 2016 and July 24, 2020, inclusive (the “Class Period”).
Plaintiff seeks to recover compensable damages caused by Defendants’ violations of the federal
securities laws under the Securities Exchange Act of 1934 (the “Exchange Act”).
JURISDICTION AND VENUE
2.

The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of

the Exchange Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the
SEC (17 C.F.R. § 240.10b-5).
3.

This Court has jurisdiction over the subject matter of this action pursuant to 28

U.S.C. § 1331, and Section 27 of the Exchange Act (15 U.S.C. §78aa).
4.

Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391(b) and Section

27 of the Exchange Act (15 U.S.C. § 78aa(c)) as the alleged misstatements entered and the
subsequent damages took place in this judicial district and the Company is headquartered in this
judicial district.
5.

In connection with the acts, conduct and other wrongs alleged in this complaint,

Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce,
including but not limited to, the United States mails, interstate telephone communications and the
facilities of the national securities exchange.
PARTIES
6.

Plaintiff, as set forth in the accompanying certification, incorporated by reference

herein, purchased AEP securities during the Class Period and was economically damaged thereby.

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7.

Defendant AEP is an electric public utility holding company which engages in the

generation, transmission, and distribution of electricity for sale to retail and wholesale customers
in the United States.
8.

AEP is incorporated in New York and its principal executive office is located at 1

Riverside Plaza, Columbus, Ohio. AEP’s common stock trades on the New York Stock Exchange
(“NYSE”) under the ticker symbol “AEP” and the Company’s preferred stock trades on the NYSE
under the ticker symbol “AEP-PB.”
9.

Defendant Nicholas K. Akins (“Akins”) has served as the Company’s President,

Chief Executive Officer, and Chairman during the Class Period.
10.

Defendant Brian X. Tierney (“Tierney”) has served as the Company’s Chief

Financial Officer and Executive Vice President during the Class Period.
11.

Defendant Joseph M. Buonaiuto (“Buonaiuto”) has served as the Company’s

Controller and Chief Accounting Officer during the Class Period.
12.

Defendants Akins, Tierney, and Buonaiuto are collectively referred to herein as the

“Individual Defendants.”
13.

Each of the Individual Defendants:
(a)

directly participated in the management of the Company;

(b)

was directly involved in the day-to-day operations of the Company at the
highest levels;

(c)

was privy to confidential proprietary information concerning the Company
and its business and operations;

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(d)

was directly or indirectly involved in drafting, producing, reviewing and/or
disseminating the false and misleading statements and information alleged
herein;

(e)

was directly or indirectly involved in the oversight or implementation of
the Company’s internal controls;

(f)

was aware of or recklessly disregarded the fact that the false and
misleading statements were being issued concerning the Company; and/or

(g)

approved or ratified these statements in violation of the federal securities
laws.

14.

The Company is liable for the acts of the Individual Defendants and its employees

under the doctrine of respondeat superior and common law principles of agency because the
wrongful acts complained of herein were carried out within the scope of their employment.
15.

The scienter of the Individual Defendants and other employees and agents of the

Company is similarly imputed to AEP under respondeat superior and agency principles.
16.

Defendant AEP and the Individual Defendants are collectively referred to herein as

“Defendants.”
SUBSTANTIVE ALLEGATIONS
Background Information
17.

On July 21, 2020, the U.S. Attorney’s Office for the Southern District of Ohio

issued a press release entitled “Ohio House Speaker, former chair of Ohio Republican Party, 3
other individuals & 501(c)(4) entity charged in federal public corruption racketeering conspiracy
involving $60 million” which announced the following, in pertinent part, regarding the bribery
scheme:

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COLUMBUS, Ohio – The Ohio Speaker of the House was arrested this morning
and charged in a federal racketeering conspiracy involving approximately $60
million paid to a 501(c)(4) entity to pass and uphold a billion-dollar nuclear plant
bailout.
It is alleged that Larry Householder, 61, of Glenford, Ohio, and the enterprise
conspired to violate the racketeering statute through honest services wire fraud,
receipt of millions of dollars in bribes and money laundering.
Four other individuals were also arrested and charged. They include:
Mathew Borges, 48, of Bexley, a lobbyist who previously served as chair of the
Ohio Republican Party;
Jeffrey Longstreth, 44, of Columbus, Householder’s longtime campaign and
political strategist;
Neil Clark, 67, of Columbus, a lobbyist who owns and operates Grant Street
Consultants and previously served as budget director for the Ohio Republican
Caucus; and
Juan Cespedes, 40, of Columbus, a multi-client lobbyist.
Generation Now, a corporate entity registered as a 501(c)(4) social welfare
organization, was also charged.
*

*

*

According to the 80-page criminal complaint unsealed today, from March 2017
to March 2020, the enterprise received millions of dollars in exchange for
Householder’s and the enterprise’s help in passing House Bill 6, a billion-dollar
bailout that saved two failing, Ohio nuclear power plants from closing.
The defendants then also allegedly worked to corruptly ensure that HB 6 [Ohio
House Bill 6] went into effect by defeating a ballot initiative to overturn the
legislation. The Enterprise received approximately $60 million into Generation
Now from an energy company and its affiliates during the relevant period.
As alleged, in February 2017, Longstreth incorporated Generation Now as a
501(c)(4) social welfare entity purporting to promote energy independence and
economic development; however, the entity was secretly controlled by
Householder. As Clark stated in a recorded conversation, “Generation Now is the
Speaker’s (c)(4).” Pursuant to federal law, the names and addresses of
contributors to 501(c)(4)s are not made available for public inspection.
In March 2017, Householder began receiving quarterly $250,000 payments from
the related-energy companies into the bank account of Generation Now. The
defendants allegedly spent millions of the company’s dollars to support
Householder’s political bid to become Speaker, to support House candidates they
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believed would back Householder, and for their own personal benefit. When asked
how much money was in Generation Now, Clark said, “it’s unlimited.”
The affidavit filed in support of the criminal complaint also alleges:
In 2018, the enterprise spent energy company-to-Generation Now money on
approximately 21 different state candidates – 15 (including Householder) in the
primary, and six additional candidates in the general election. The Enterprise spent
more than one million in fall 2018 alone to flood the airways with negative ads
against enterprise opponents. Most of these candidates won the 2018 general
election. All who won voted for Householder as Speaker.
Money passed from the energy company through Generation Now was used to pay
for Householder campaign staff, which would otherwise have been paid by
Householder’s candidate committee, Friends of Larry Householder.
Householder received more than $400,000 in personal benefits as a result of the
payments into Generation Now, including funds to settle a personal lawsuit, to pay
for costs associated with his residence in Florida, and to pay off thousands of dollars
of credit card debt.
The enterprise paid $15,000 to an individual to provide insider information about
the ballot initiative and offered to pay signature collectors for the ballot initiative
$2,500 cash and plane fare to stop gathering signatures.
*

*

*

“It takes courage for citizens to assist law enforcement in the ways detailed in the
affidavit,” U.S. Attorney David M. DeVillers said. “We are grateful to those who
felt a moral duty to work together with agents in bringing to light this alleged,
significant public corruption.”
“All forms of public corruption are unacceptable,” stated FBI Cincinnati Special
Agent in Charge Chris Hoffman. “When the corruption is alleged to reach some
of the highest levels of our state government, the citizens of Ohio should be
shocked and appalled.”
(Emphasis added.)
18.

The criminal complaints and affidavits were filed that same day in the Criminal

Proceedings. These documents detailed a brazen scheme by Ohio-based energy companies to
corrupt the political process and undermine democratic institutions in the State of Ohio in order to
secure passage of Ohio House Bill 6 (“HB6”). The allegations contained in the criminal complaints
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and affidavits were supported by detailed transcripts of phone calls, recorded conversations, text
messages, bank records and contemporaneous documentary evidence.
Overview of the Corruption Scheme
19.

In January 2017, then-former Ohio House Speaker Larry Householder met with

representatives from another Ohio-based energy company during a flight on one of the its jets.
After more than a decade, Householder had won back his old Ohio House seat in 2016 and was
eager to re-ascend to his former Speakership. During or around the time of the flight, a corrupt
bargain was struck between Householder and major players in the Ohio energy industry which
sent millions of dollars in payments to Householder for his personal enrichment and to support his
bid for Speakership. In exchange, Householder promised to secure the passage of legislation that
would provide benefits to Ohio energy companies, including AEP.
20.

In February 2017, the corrupt conspiracy between his affiliates went into motion in

earnest with the establishment of “Generation Now” and “Energy Pass-Through,” 501(c)(4)
organizations used to funnel dark money from Ohio energy companies to Householder and his
affiliates. In all, more than $60 million was paid to Householder and his operatives in furtherance
of the bribery scheme. As one of the alleged co-conspirators, lobbyist Neil Clark (characterized in
the criminal complaint as Householder’s political “hit man”) stated in a secretly recorded
conversation: “Nobody knows the money goes to the Speaker’s account . . . it’s not recorded.”
21.

The clandestine payments were used to fund the political campaigns of over 20

state legislative candidates. The enterprise managed these candidates’ campaigns, paid their staffs,
and designed and paid for mailers and commercials. Most of these candidates won their elections.
All who won voted for Householder as Speaker and all but two ultimately voted for HB6 despite

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its unpopularity. In addition, Householder used a portion of the funds to enrich himself personally,
including to buy a home in Florida and to settle a personal lawsuit against him.
22.

The day Householder was elected Speaker he quickly moved to uphold his end of

the bargain by pledging to create a standing subcommittee on energy generation. Householder
followed through shortly thereafter, securing the votes for HB6 and defending the bill against a
citizens’ ballot initiative. HB6 includes a provision for the recovery of Ohio Valley Electric
Corporation (“OVEC”), which is approximately 43% owned by AEP, costs through 2030. HB6
also includes provisions cutting Ohio renewable energy standards and cutting Ohio energy
efficiency standards – both benefiting AEP as well.
23.

Ohio energy companies including FirstEnergy Corp., FirstEnergy Solutions Corp.

(now Energy Harbor Corp.), and AEP greased the bill’s passage by funneling millions of dollars
through dark money political groups. These groups in turn paid for a massive media campaign in
support of HB6 while concealing the energy companies’ involvement. The massive media blitz
was used to sway public opinion, often through highly misleading ads, and provide cover for
politicians to vote in favor of the unpopular bill. Householder also personally pressured lawmakers
to support the bill, threatening those who opposed him and developing a “hyper local” “Senatorby-Senator game plan” to get the votes necessary to secure passage.
24.

There was only a short time between when Householder became Speaker in January

2019 and HB6 was signed into law in July 2019. At the same time that the conspiracy was receiving
millions of dollars from Ohio energy companies it was taking overt steps to put the plans to corrupt
the legislative process into action.

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25.

These illicit activities achieved their aim, and, in July 2019, HB6 passed and was

signed into law. Almost immediately, public opposition began to mount and citizen groups worked
to get on the ballot a voter referendum to repeal the law.
26.

The enterprise went into overdrive to thwart this initiative, secretly funding yet

another round of highly misleading political advertisements through its dark money network. At
least $38 million was wired through Generation Now, Inc. (“Generation Now”) into a front
company that paid for a media blitz of commercials and fliers orchestrated by the illicit enterprise.
These advertisements were intended to stoke fear among Ohio citizens by falsely claiming that
China was using the petition drive to invade Ohio’s energy grid. The following examples are
typical of the underhanded campaign:

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27.

The scheme went further, hiring top signature collection firms in order to prevent

them from working on the ballot initiative by creating a conflict of interest. Energy companyfunded Generation Now paid at least 15 such firms not to work. The enterprise also bribed an
employee of the citizens’ ballot initiative for inside information that could be used against the
campaign. The transaction was implemented by Matthew Borges, then a lobbyist, who was also
the former Chairman of the Ohio Republican Party, and current criminal defendant in the Criminal
Proceedings. Other operatives bribed signature collectors in order to subvert the ballot campaign’s
efforts. In the end, the energy companies’ massive resources and unscrupulous tactics successfully
prevented the referendum from gathering the requisite signatures and HB6 remained in effect.
28.

The illicit nature of these activities was understood. As one of the criminal

defendants, another industry lobbyist, stated on a secretly recorded line, “everybody knows
[Householder is] pay to play.” For a time, the Company was able to conceal its misdeeds from the
public and the market, successfully inflating the price of its securities.

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Materially False and Misleading
Statements Issued During the Class Period
29.

On November 2, 2016, AEP filed its quarterly report on Form 10-Q with the SEC

for the period ended September 30, 2016 (the “3Q 16 10-Q”) which was signed by Defendant
Buonaiuto. Attached to the 3Q 16 10-Q were certifications pursuant to the Sarbanes-Oxley Act of
2002 (“SOX”) signed by Defendants Akins and Tierney attesting to the accuracy of the financial
statements and the disclosure of all fraud.
30.

The 3Q 16 10-Q stated the following, in pertinent part, regarding the Company’s

regulatory and legislative outlook and efforts:
In September 2016, due to AEP’s ongoing evaluation of strategic alternatives for
its merchant generation assets, declining forecasts of future energy and capacity
prices, and a decreasing likelihood of cost recovery through regulatory
proceedings or legislation in the state of Ohio providing for the recovery of AEP’s
existing Ohio merchant generation assets, AEP performed an impairment analysis
at the unit level on the remaining merchant generation assets in accordance with
accounting guidance for impairments of long-lived assets. The evaluation was
performed using generating unit specific estimated future cash flows and resulted
in a material impairment of certain merchant generation fleet assets. As a result,
AEP recorded a pretax impairment of $2.3 billion ($1.5 billion, net of tax) in
Asset Impairments and Other Related Charges on the statement of operations
related to 2,684 MWs of Ohio merchant generation including Cardinal Unit 1,
43.5% ownership interest in Conesville Unit 4, Conesville Units 5-6, 26.0%
ownership interest in Stuart Units 1-4, and 25.4% ownership interest in Zimmer
Unit 1, as well as Putnam coal and I&M’s Price River coal reserves, Desert Sky
and Trent Wind Farms and the merchant generation portion of the Oklaunion Plant.
As of September 30, 2016, the remaining net book value of these assets is $50
million. See “Merchant Generating Assets (Generation & Marketing Segment)”
section of Note 6 for additional information.
Management continues to evaluate potential alternatives for the remaining
merchant generation assets. These potential alternatives may include, but are not
limited to, propose restructuring of Ohio electricity regulations to allow certain
of these assets to be acquired by OPCo [Ohio Power Company, an AEP electric
utility subsidiary] for the benefit of its customers, transfer or sale of AEP’s
ownership interests, or a wind down of merchant coal-fired generation fleet
operations. . . .

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*

*

*

Federal and state legislation or regulations that mandate limits on the emission of
CO2 could result in significant increases in capital expenditures and operating costs,
which in turn, could lead to increased liquidity needs and higher financing
costs. Excessive costs to comply with future legislation or regulations might
force AEP to close some coal-fired facilities and could lead to possible
impairment of assets.
(Emphasis added.)
31.

On February 28, 2017, AEP filed its yearly report on Form 10-K with the SEC for

the year ended December 31, 2016 (the “2016 Annual Report”) which was signed by Defendants
Akins, Tierney, and Buonaiuto. Attached to the 2016 Annual Report were certifications pursuant
to SOX signed by Defendants Akins and Tierney attesting to the accuracy of the financial
statements and the disclosure of all fraud.
32.

The 2016 Annual Report stated the following, in pertinent part, regarding the

regulations and Company’s legislative outlook and efforts:
AEP’s vertically integrated public utility subsidiaries’ retail rates and certain
other matters are subject to traditional cost-based regulation by the state utility
commissions. AEP’s vertically integrated public utility subsidiaries are also
subject to regulation by the FERC [Federal Energy Regulatory Commission] under
the Federal Power Act with respect to wholesale power and transmission service
transactions. . . . AEP and its vertically integrated public utility subsidiaries are also
subject to the regulatory provisions of EPACT [The Energy Policy Act of 2005],
much of which is administered by the FERC.
Rates
Historically, state utility commissions have established electric service rates on a
cost-of-service basis, which is designed to allow a utility an opportunity to recover
its cost of providing service and to earn a reasonable return on its investment used
in providing that service. A utility’s cost of service generally reflects its operating
expenses, including operation and maintenance expense, depreciation expense and
taxes. State utility commissions periodically adjust rates pursuant to a review of
(a) a utility’s adjusted revenues and expenses during a defined test period and (b)
such utility’s level of investment. Absent a legal limitation, such as a law limiting
the frequency of rate changes or capping rates for a period of time, a state utility
commission can review and change rates on its own initiative. Some states may
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initiate reviews at the request of a utility, customer, governmental or other
representative of a group of customers. Such parties may, however, agree with one
another not to request reviews of or changes to rates for a specified period of time.
Public utilities have traditionally financed capital investments until the new asset is
placed in service. Provided the asset was found to be a prudent investment, it was
then added to rate base and entitled to a return through rate recovery. Given long
lead times in construction, the high costs of plant and equipment and volatile capital
markets, management is actively pursuing strategies to accelerate rate recognition
of investments and cash flow. AEP representatives continue to engage state
commissioners and legislators on alternative ratemaking options to reduce
regulatory lag and enhance certainty in the process. These options include preapprovals, a return on construction work in progress, rider/trackers, formula
rates and the inclusion of future test-year projections into rates.
The rates of AEP’s vertically integrated public utility subsidiaries are generally
based on the cost of providing traditional bundled electric service (i.e., generation,
transmission and distribution service).
Historically, the state regulatory
frameworks in the service area of the AEP vertically integrated public utility
subsidiaries reflected specified fuel costs as part of bundled (or, more recently,
unbundled) rates or incorporated fuel adjustment clauses in a utility’s rates and
tariffs. Fuel adjustment clauses permit periodic adjustments to fuel cost recovery
from customers and therefore provide protection against exposure to fuel cost
changes.
*

*

*

Technology advancements, increased demand for clean energy, changing
consumer behaviors, low-priced and abundant natural gas, and regulatory and
public policy reforms are among the catalysts for transformation within the
industry that impact competition for AEP’s vertically integrated public utility
subsidiaries. AEP’s vertically integrated public utility subsidiaries also compete
with self-generation and with distributors of other energy sources, such as natural
gas, fuel oil, renewables and coal, within their service areas. The primary factors
in such competition are price, reliability of service and the capability of customers
to utilize alternative sources of energy other than electric power. With respect to
competing generators and self-generation, the public utility subsidiaries of AEP
believe that they currently maintain a competitive position.
Changes in regulatory policies and advances in newer technologies for batteries or
energy storage, fuel cells, microturbines, wind turbines and photovoltaic solar cells
are reducing costs of new technology to levels that are making them competitive
with some central station electricity production. . . .
AEP typically recovers undepreciated plant balances and associated operating
costs, each including a return, from customers through regulated rates in regulated
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jurisdictions. Failure to recover these costs could reduce future net income and
cash flows and possibly harm financial condition.
Recent changes in the global economy have led to increased competition for many
industrial customers in the United States, including those served by the AEP
System. Industrial customers that are downsizing or reorganizing often close a
facility based upon its costs, which may include, among other things, the cost of
electric power. The vertically integrated public utility subsidiaries of AEP work
with such customers to meet their business needs. For example, various off-peak or
interruptible supply options may be provided pursuant to tariffs filed with, and
approved by, the various state commissions. The vertically integrated public utility
subsidiaries of AEP also work with customers that seek to source more of their
electric power from renewable resources. Depending on the jurisdiction,
customers may have access to green power tariffs. In other instances, AEP
purchases renewable power that is available to all customers in a specific
jurisdiction.
(Emphasis added.)
33.

On April 28, 2017, AEP filed its quarterly report on Form 10-Q with the SEC for

the period ended March 31, 2017 (the “1Q 17 10-Q”) which was signed by Defendant Buonaiuto.
Attached to the 1Q 17 10-Q were certifications pursuant to SOX signed by Defendants Akins and
Tierney attesting to the accuracy of the financial statements and the disclosure of all fraud.
34.

The 1Q 17 10-Q stated the following, in pertinent part, regarding the Company’s

regulatory and legislative outlook and efforts:
Climate Change, CO2 Regulation and Energy Policy
The majority of the states where AEP has generating facilities passed legislation
establishing renewable energy, alternative energy and/or energy efficiency
requirements that can assist in reducing carbon emissions. Management is taking
steps to comply with these requirements, including increasing wind and solar
installations and power purchases and broadening the AEP System’s portfolio of
energy efficiency programs.
*

*

*

Federal and state legislation or regulations that mandate limits on the emission of
CO2 could result in significant increases in capital expenditures and operating
costs, which in turn, could lead to increased liquidity needs and higher financing
costs. Excessive costs to comply with future legislation or regulations might force
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AEP to close some coal-fired facilities and could lead to possible impairment of
assets.
*

*

*

In September 2016, due to AEP’s ongoing evaluation of strategic alternatives for
its merchant generation assets, declining forecasts of future energy and capacity
prices, and a decreasing likelihood of cost recovery through regulatory
proceedings or legislation in the state of Ohio providing for the recovery of AEP’s
existing Ohio merchant generation assets, AEP performed an impairment analysis
at the unit level on the remaining merchant generation assets in accordance with
accounting guidance for impairments of long-lived assets.
(Emphasis added.)
35.

On May 25, 2017, AEP released its 2017 Corporate Accountability Report, which

stated the following, in pertinent part, regarding the Company’s clean energy strategy, and its
regulatory and legislative outlook and efforts:
Carbon and Climate
AEP’s carbon footprint has been dramatically reduced in recent years. In 2017, we
estimate that our carbon emissions will be 56 percent below 2000 levels. In addition
to new renewable sources, the sale of merchant generation, previous coal unit
retirements and economic factors such as lower natural gas prices, all contributed
to this decline.
Carbon and climate change continue to take center stage in discussions with
many of our stakeholders. Investors and environmental groups ask us about how
we will continue to transition to a less-carbon-intensive energy future, and
customers want more access to renewable resources to meet their own clean
energy objectives.
Our path forward is clear. We do not foresee adding new coal. However, our
remaining fossil and nuclear units provide critical 24/7 power to the grid and a
resilient source of power for all customers. We need these resources to ensure a
continued balanced portfolio of resources.
Regardless of the political environment and the fate of the Clean Power Plan or
other changes that may be in the works, AEP remains committed to a clean energy
future because that is what our customers and stakeholders expect. We have
always maintained that any approach to climate change should be economy-wide
and addressed through legislative policy. That said, the U.S. Supreme Court has
ruled that the U.S. Environmental Protection Agency can regulate carbon, so we
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are preparing for that prospect. Our planning criteria includes a proxy cost of carbon
when developing all of our resource plans to prepare for that eventuality.
We will continue to engage with all of our stakeholders on carbon and climate
change and to be transparent about our plans.
*

*

*

Lobbying and Political Contributions
The electric utility industry is undergoing a fundamental transformation driven by
a number of factors, including new regulations and public policies. For the benefit
of all stakeholders, we actively participate in the political process and in lobbying
activities at the national, state and local levels.
The investments needed to modernize the power grid are in the billions of dollars,
and the stakes have never been higher. To understand the policies and regulations
that could affect our business, we participate in a number of organizations, lobby
on our customers’ behalf and contribute to political candidates.
Each year, AEP publicly discloses lobbying activities and political contributions.
We also annually report on the portions of membership dues from organizations
such as the Business Roundtable (BRT) and Edison Electric Institute (EEI) that go
toward lobbying. We post our lobbying policy online and we have a process in
place to review political contributions annually with AEP’s Board of Director’s
Committee on Directors and Corporate Governance.
(Emphasis added.)
36.

On July 27, 2017, AEP filed its quarterly report on Form 10-Q with the SEC for the

period ended June 30, 2017 (the “2Q 17 10-Q”) which was signed by Defendant Buonaiuto.
Attached to the 2Q 17 10-Q were certifications pursuant to SOX signed by Defendants Akins and
Tierney attesting to the accuracy of the financial statements and the disclosure of all fraud.
37.

The 2Q 17 10-Q stated the following, in pertinent part, regarding the Company’s

regulatory and legislative outlook and efforts:
Federal and state legislation or regulations that mandate limits on the emission of
CO2 could result in significant increases in capital expenditures and operating
costs, which in turn, could lead to increased liquidity needs and higher financing
costs. Excessive costs to comply with future legislation or regulations might force

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AEP to close some coal-fired facilities and could lead to possible impairment of
assets.
*

*

*

In September 2016, due to AEP’s ongoing evaluation of strategic alternatives for
its merchant generation assets, declining forecasts of future energy and capacity
prices, and a decreasing likelihood of cost recovery through regulatory proceedings
or legislation in the state of Ohio providing for the recovery of AEP’s existing Ohio
merchant generation assets, AEP performed an impairment analysis at the unit level
on the remaining merchant generation assets in accordance with accounting
guidance for impairments of long-lived assets.
38.

On October 27, 2017, AEP filed its quarterly report on Form 10-Q with the SEC

for the period ended September 30, 2017 (the “3Q 17 10-Q”) which was signed by Defendant
Buonaiuto. Attached to the 3Q 17 10-Q were certifications pursuant to SOX signed by Defendants
Akins and Tierney attesting to the accuracy of the financial statements and the disclosure of all
fraud.
39.

The 3Q 17 10-Q stated the following, in pertinent part, regarding the Company’s

clean energy strategy, and also its regulatory and legislative outlook and efforts:
The majority of the states where AEP has generating facilities passed legislation
establishing renewable energy, alternative energy and/or energy efficiency
requirements that can assist in reducing carbon emissions. Management is taking
steps to comply with these requirements, including increasing wind and solar
installations and power purchases and broadening the AEP System’s portfolio of
energy efficiency programs.
*

*

*

The Federal EPA has re-examined its legal interpretation of the “best system of
emission reduction” and found that based on the statutory text, legislative history,
use of similar terms elsewhere in the CAA and its own historic implementation of
Section 111 that a narrower interpretation of the term limits it to those designs,
processes, control technologies and other systems that can be applied directly to or
at the source. Since the primary systems relied on in the CPP are not consistent with
that interpretation, the Federal EPA proposes that the rule be withdrawn.
Management does not expect a change in AEP’s overall strategy as a result of
the proposed repeal.

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Federal and state legislation or regulations that mandate limits on the emission of
CO2 could result in significant increases in capital expenditures and operating
costs, which in turn, could lead to increased liquidity needs and higher financing
costs. Excessive costs to comply with future legislation or regulations might force
AEP to close some coal-fired facilities and could lead to possible impairment of
assets.
*

*

*

In September 2016, due to AEP’s ongoing evaluation of strategic alternatives for
its merchant generation assets, declining forecasts of future energy and capacity
prices, and a decreasing likelihood of cost recovery through regulatory proceedings
or legislation in the state of Ohio providing for the recovery of AEP’s existing Ohio
merchant generation assets, AEP performed an impairment analysis at the unit level
on the remaining merchant generation assets in accordance with accounting
guidance for impairments of long-lived assets. Based on the impairment analysis
performed in the third quarter of 2016, AEP recorded a pretax impairment of $2.3
billion in Asset Impairments and Other Related Charges on the statement of
operations.
(Emphasis added.)
40.

On February 6, 2018, AEP issued a press release entitled “AEP's Clean Energy

Strategy Will Achieve Significant Future Carbon Dioxide Reductions” which touted the
Company’s strategy towards cleaner energy, quoting Defendant Akins:
“AEP is focused on modernizing the power grid, expanding renewable energy
resources and delivering cost-effective, reliable energy to our customers,” said
Nicholas K. Akins, AEP chairman, president and chief executive officer. “Our
customers want us to partner with them to provide cleaner energy and new
technologies, while continuing to provide reliable, affordable energy. Our investors
want us to protect their investment in our company, deliver attractive returns and
manage climate-related risk. This long-term strategy allows us to do both.”
41.

On February 23, 2018, AEP filed its yearly report on Form 10-K with the SEC for

the year ended December 31, 2017 (the “2017 Annual Report”) which was signed by Defendants
Akins, Tierney, and Buonaiuto. Attached to the 2017 Annual Report were certifications pursuant
to SOX signed by Defendants Akins and Tierney attesting to the accuracy of the financial
statements and the disclosure of all fraud.

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42.

The 2017 Annual Report stated the following, in pertinent part, regarding the

regulations and Company’s legislative outlook and efforts:
Corporate Governance
In response to environmental issues and in connection with its assessment of
AEP’s strategic plan, the Board of Directors continually reviews the risks posed
by new environmental rules and requirements that could accelerate the
retirement of coal-fired generation assets. The Board of Directors is informed of
any new environmental regulations and proposed regulation or legislation that
would affect the company. The Board’s Committee on Directors and Corporate
Governance oversees the company’s annual Corporate Accountability Report,
which includes information about the company’s environmental, financial and
social performance. In addition, as a result of ongoing corporate governance
outreach efforts with shareholders, AEP set new carbon dioxide emission reduction
goals that were published in a new report in February 2018, “American Electric
Power: Strategic Vision for a Clean Energy Future.”
*

*

*

In the event that alternative generation resources are mandated, subsidized or
encouraged through climate legislation or regulation or otherwise are economically
competitive and added to the available generation supply, such resources could
displace a higher marginal cost fossil plant, which could reduce the price at which
market participants sell their electricity. These events could cause AGR to retire
generating capacity prior to the end of its estimated useful life.
*

*

*

Lobbying and Political Contributions
. . . The investments needed to modernize the power grid are in the billions of
dollars, and the stakes have never been higher. To understand the policies and
regulations that could affect our business, we participate in a number of
organizations, lobby on our customers’ behalf and contribute to political
candidates.
Each year, AEP publicly discloses lobbying activities and political contributions.
We also annually report on the portions of membership dues paid to organizations
such as the U.S. Chamber of Commerce and Edison Electric Institute (EEI) that go
toward lobbying. We post our lobbying policy online and we discuss political
contributions annually with AEP’s Board of Director’s Committee on Directors and
Corporate Governance.

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. . . In general, we believe it is better to be at the table and engaged in the discussion
whether we are in total agreement or not. When we disagree, we voice our concerns
and work to change the position. Sometimes we prevail, and sometimes we do not,
but we strive to reach an appropriate position, based on the facts available. In
addition, many of our customers belong to these organizations, and this helps us
better understand their concerns and needs.
We believe in transparency and active participation in public debate. Our
experience is that open, candid discussion and a good-faith attempt to reach
common ground is the best way to do business.
(Emphasis added.)
43.

On April 26, 2018, AEP filed its quarterly report on Form 10-Q with the SEC for

the period ended March 31, 2018 (the “1Q 18 10-Q”) which was signed by Defendant Buonaiuto.
Attached to the 1Q 18 10-Q were certifications pursuant to SOX signed by Defendants Akins and
Tierney attesting to the accuracy of the financial statements and the disclosure of all fraud.
44.

The 1Q 18 10-Q stated the following, in pertinent part, regarding the Company’s

regulatory and legislative outlook and efforts:
Climate Change, CO2 Regulation and Energy Policy
The majority of the states where AEP has generating facilities passed legislation
establishing renewable energy, alternative energy and/or energy efficiency
requirements that can assist in reducing carbon emissions. Management is taking
steps to comply with these requirements, including increasing wind and solar
installations and power purchases and broadening the AEP System’s portfolio of
energy efficiency programs.
*

*

*

Federal and state legislation or regulations that mandate limits on the emission of
CO2 could result in significant increases in capital expenditures and operating
costs, which in turn, could lead to increased liquidity needs and higher financing
costs. Excessive costs to comply with future legislation or regulations might force
AEP to close some coal-fired facilities and could lead to possible impairment of
assets.

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45.

On May 3, 2018, AEP released its 2018 Corporate Accountability Report, which

stated the following, in pertinent part, regarding the Company’s customer focus, clean energy
strategy, and also its regulatory and legislative outlook and efforts:
Putting Customers First
We deeply value the relationships we have with our customers and communities.
As fast as technology changes and the demand for flexibility of the power grid
grows, our customers’ expectations are also evolving. We want to collaborate with
them to deliver energy solutions and provide service that goes beyond their
expectations. Today, we’re taking steps to ensure every customer has a great
experience whenever, and however, they interact with AEP. . . .
In 2018, we are building a new, state-of-the-art Social Media Center to enhance
and expand our ability to listen to and engage with customers and key
stakeholders. Customers want to use digital channels to access information or buy
services. We will pilot a new energy usage program via a digital platform. We are
providing additional training to our customer operations representatives so they can
provide an exceptional experience to every customer, every time. . . .

We believe that regulators must ensure that these new technologies are provided to
all. AEP is at the forefront of developing a truly sustainable, inclusive energy future
that recognizes the unique needs of all customers and leaves no one behind. We will
continue to advance new and innovative energy solutions, working with our
customers, regulators and legislators to make the changes to support a modern
and resilient grid.
*

*

*

Regulatory and Public Policy
. . . In 11 states, AEP operates within a variety of jurisdictional regulatory
frameworks. Those frameworks primarily are governed by state legislatures that
direct state regulatory commissions to achieve overarching policy goals. These
regulatory and legislative environments, in conjunction with federal regulation and
legislation, define the parameters of AEP’s business and planning models.
Our focus always is on a safe and reliable grid that is resilient and adaptive. Our
generation, transmission and distribution system investments directly affect our
customers and shareholders. These investments must coexist with regulation and
policy considerations such as environmental rules and affordability. As we
transition to a clean energy future, we are reshaping our asset base in a reliable and
affordable manner for our customers while managing the financial risk for our
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shareholders. The changes we are making must be compatible with the regulatory
frameworks in which we exist on the wires (transmission and distribution) side of
the business.
However, regulatory frameworks must be responsive to today’s technology and
customer preference environment. AEP is at the forefront of evaluating and
deploying technologies to improve the customer experience. Regulations must be
progressive enough to allow the utility to provide these solutions for customers.
The customer must be the center of our focus and analysis and regulatory policy
decision-making.
*

*

*

Public Policy and Issue Management
Similar to other companies, AEP has a public policy strategy that seeks to influence
decisions being made at Congress, FERC, state legislatures and regulatory
commissions. We do this to mitigate our risk exposure and to help us achieve our
business objectives.
In 2017, AEP formed the Policy Advisory Team (PAT) to better manage public
policy issues. This team is composed of senior executives across AEP, including
some of those who represent the company in Washington, D.C., and the state
capitals in our service territory.
The PAT considers policy options on issues of relevance to the company. The
multi-departmental, cross-function structure of the PAT supports internal policy
analysis and debate. The approach helps ensure that AEP is speaking with one
voice on important public policy considerations and that all employees, and
ultimately external stakeholders, are clear on our policy positions and objectives.
The goal of the PAT is to ensure a smoother, more consistent policy strategy
across the company.
In strategic discussions about how we can best align ourselves to maximize the
customer benefits of new technologies, we talk about “future-proofing” our
company. The pace and scope of change underway in the utility sector is
indisputable. In order to adapt and bring the most value to customers, utilities
require a regulatory and legislative framework that allows them the flexibility to
incorporate new technologies, including those we’ve not even envisioned yet. We
need a regulatory paradigm that fosters rapid deployment of creative energy
solutions. . . .
But we also have to ask ourselves: “What about the customer? Do they have to
wait longer for a solution? What do they do in the meantime?” We must center
our decisions and timing on a framework that works for all customers.

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. . . In 2017, the Public Utilities Commission of Ohio (PUCO) launched an
initiative called PowerForward to study grid modernization in the state. The
PUCO is focusing on new technologies and regulatory innovation that could
benefit customers in the future while modernizing the grid. Through this process,
the PUCO has acknowledged customers’ desire for more technology and
innovation in the electric sector, along with the need for a modern regulatory
road map to make it happen. This is the type of structured stakeholder conversation
that is needed to enable the paradigm shift to occur.
(Emphasis added.)
46.

On July 26, 2018, AEP filed its quarterly report on Form 10-Q with the SEC for the

period ended June 30, 2018 (the “2Q 18 10-Q”) which was signed by Defendant Buonaiuto.
Attached to the 2Q 18 10-Q were certifications pursuant to SOX signed by Defendants Akins and
Tierney attesting to the accuracy of the financial statements and the disclosure of all fraud.
47.

The 2Q 18 10-Q stated the following, in pertinent part, regarding the Company’s

clean energy strategy and its regulatory and legislative outlook and efforts:
AEP has taken action to reduce and offset CO2 emissions from its generating fleet
and expects CO2 emissions from its operations to continue to decline due to the
retirement of some of its coal-fired generation units, and actions taken to diversify
the generation fleet and increase energy efficiency where there is regulatory support
for such activities. The majority of the states where AEP has generating facilities
passed legislation establishing renewable energy, alternative energy and/or energy
efficiency requirements that can assist in reducing carbon emissions. Management
is taking steps to comply with these requirements, including increasing wind and
solar installations, power purchases and broadening AEP System’s portfolio of
energy efficiency programs.
*

*

*

Federal and state legislation or regulations that mandate limits on the emission of
CO2 could result in significant increases in capital expenditures and operating
costs, which in turn, could lead to increased liquidity needs and higher financing
costs. Excessive costs to comply with future legislation or regulations might force
AEP to close some coal-fired facilities, which could possibly lead to impairment of
assets.
48.

On October 25, 2018, AEP filed its quarterly report on Form 10-Q with the SEC

for the period ended September 30, 2018 (the “3Q 18 10-Q”) which was signed by Defendant
23

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Buonaiuto. Attached to the 3Q 18 10-Q were certifications pursuant to SOX signed by Defendants
Akins and Tierney attesting to the accuracy of the financial statements and the disclosure of all
fraud.
49.

The 3Q 18 10-Q stated the following, in pertinent part, regarding the Company’s

clean energy strategy and its regulatory and legislative outlook and efforts:
AEP has taken action to reduce and offset CO2 emissions from its generating fleet
and expects CO2 emissions from its operations to continue to decline due to the
retirement of some of its coal-fired generation units, and actions taken to diversify
the generation fleet and increase energy efficiency where there is regulatory support
for such activities. The majority of the states where AEP has generating facilities
passed legislation establishing renewable energy, alternative energy and/or energy
efficiency requirements that can assist in reducing carbon emissions. Management
is taking steps to comply with these requirements, including increasing wind and
solar installations, power purchases and broadening AEP System’s portfolio of
energy efficiency programs.
In February 2018, AEP announced new intermediate and long-term CO2 emission
reduction goals, based on the output of the company’s integrated resource plans,
which take into account economics, customer demand, grid reliability and
resiliency, regulations and the company’s current business strategy. The
intermediate goal is a 60% reduction from 2000 CO2 emission levels from AEP
generating facilities by 2030; the long-term goal is an 80% reduction of CO2
emissions from AEP generating facilities from 2000 levels by 2050. AEP’s total
projected CO2 emissions in 2018 are approximately 90 million metric tons, a 46%
reduction from AEP’s 2000 CO2 emissions of approximately 167 million metric
tons.
Federal and state legislation or regulations that mandate limits on the emission of
CO2 could result in significant increases in capital expenditures and operating
costs, which in turn, could lead to increased liquidity needs and higher financing
costs. Excessive costs to comply with future legislation or regulations might force
AEP to close some coal-fired facilities, which could possibly lead to impairment of
assets.
50.

On December 5, 2018, AEP issued a press release entitled “AEP Announces

Executive Leadership Changes” which touted the Company’s strategy towards cleaner energy,
quoting Defendant Akins: “With these changes, we will fully leverage the operational expertise,
strong leadership abilities and deep industry knowledge of these key leaders as we continue our
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long-term strategy of investment in smart, cleaner energy infrastructure and innovative
technological solutions for the benefit of our customers.” (Emphasis added.)
51.

On February 21, 2019, AEP filed its yearly report on Form 10-K with the SEC for

the year ended December 31, 2018 (the “2018 Annual Report”) which was signed by Defendants
Akins, Tierney, and Buonaiuto. Attached to the 2018 Annual Report were certifications pursuant
to SOX signed by Defendants Akins and Tierney attesting to the accuracy of the financial
statements and the disclosure of all fraud.
52.

The 2018 Annual Report stated the following, in pertinent part, regarding the

regulations and Company’s legislative outlook and efforts:
Corporate Governance
In response to environmental issues and in connection with its assessment of AEP’s
strategic plan, the Board of Directors continually reviews the risks posed by new
environmental rules and requirements that could accelerate the retirement of coalfired generation assets. The Board of Directors is informed of any new
environmental regulations and proposed regulation or legislation that would
significantly affect the company. The Board’s Committee on Directors and
Corporate Governance oversees the company’s annual Corporate Accountability
Report, which includes information about the company’s environmental, social,
governance and financial performance. In addition, as a result of ongoing corporate
governance outreach efforts with shareholders, AEP set new CO2 emission
reduction goals that were published in a new report in February 2018, “American
Electric Power: Strategic Vision for a Clean Energy Future.”
*

*

*

Public utilities have traditionally financed capital investments until the new asset is
placed in service. Provided the asset was found to be a prudent investment, it was
then added to rate base and entitled to a return through rate recovery. Given long
lead times in construction, the high costs of plant and equipment and volatile capital
markets, management actively pursues strategies to accelerate rate recognition of
investments and cash flow. AEP representatives continue to engage state
commissioners and legislators on alternative ratemaking options to reduce
regulatory lag and enhance certainty in the process. These options include preapprovals, a return on construction work in progress, rider/trackers, formula rates
and the inclusion of future test-year projections into rates.

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*

*

*

In the event that alternative generation resources are mandated, subsidized or
encouraged through climate legislation or regulation or otherwise are economically
competitive and added to the available generation supply, such resources could
displace a higher marginal cost fossil plant, which could reduce the price at which
market participants sell their electricity. These events could cause AGR to retire
generating capacity prior to the end of its estimated useful life.
53.

On April 23, 2019, AEP issued a press release entitled “AEP Investing To Deliver

Smarter, Cleaner Energy To Customers, Shareholders Learn At Annual Meeting” which touted the
Company’s focus on cleaner energy, quoting Defendant Akins:
“AEP continually delivers strong earnings and dividend growth driven by our
investments in a smarter, cleaner energy system,” Akins said. “Beyond our capital
investments, our employees and their commitment to the customers and
communities we serve drives the success of our company. Our talented workforce
is focused on providing reliable, affordable and cleaner energy and new
technologies to meet our customers’ needs and expectations,” Akins said.
54.

On April 26, 2019, AEP filed its quarterly report on Form 10-Q with the SEC for

the period ended March 31, 2019 (the “1Q 19 10-Q”) which was signed by Defendant Buonaiuto.
Attached to the 1Q 19 10-Q were certifications pursuant to SOX signed by Defendants Akins and
Tierney attesting to the accuracy of the financial statements and the disclosure of all fraud.
55.

The 1Q 19 10-Q stated the following regarding HB6:

The Ohio House of Representatives introduced a clean energy bill in April 2019,
which would offer incentives for power-generating facilities with zero- or reduced
carbon emissions. The Ohio bill also proposes to eliminate the current energy
efficiency and renewable mandates for Ohio electric utilities in order to pay for the
zero/reduced emission credits. Management is analyzing the impact of this new
legislation but it could be significantly amended before passage and cannot, at this
time, estimate the impact results on operations, cash flows or financial condition.
56.

On May 9, 2019, AEP issued a press release entitled “AEP Releases 2019 Corporate

Accountability Report” which touted the Company’s focus on its customers and clean energy
stating in pertinent part:

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The report’s theme, “Innovating for a Boundless Energy Future,” mirrors AEP’s
efforts to embrace technology and digitization to deliver clean, reliable energy to
its customers and value to its shareholders, while also being a positive force in
the communities it serves.
“At AEP, we see a future full of opportunities for our customers, employees,
investors, communities and our company. To create this future, we must be
increasingly innovative to develop cutting-edge solutions to complex problems.
We must be agile and adaptable to leverage rapid, sometimes unpredictable,
changes in technology. And we must nurture a diverse and engaged workforce that
is clearly focused on delivering 21st century customer service as we further
electrify our economy,” said Nicholas K. Akins, AEP chairman, president and chief
executive officer, in the report’s introduction.
Four key principles of the company’s sustainable development strategy – being a
catalyst for change; supporting environmental stewardship; supporting strong
local communities; and building a brighter energy future together with its
customers – guide AEP as the company creates benchmarks and goals.
(Emphasis added.)
57.

Also, on May 9, 2019, AEP released its 2019 Corporate Accountability Report,

which stated the following, in pertinent part, regarding the Company’s regulatory and legislative
outlook and efforts:
Lobbying and Political Contributions
. . . The investments needed to modernize the power grid are in the billions of
dollars, and the stakes have never been higher. To understand the policies and
regulations that could affect our business, we participate in a number of
organizations, lobby on our customers’ behalf and contribute to political
candidates, where allowed by law.
Each year, AEP publicly discloses lobbying activities and political contributions.
We also annually report on the portions of membership dues paid to organizations
such as the U.S. Chamber of Commerce and Edison Electric Institute (EEI) that go
toward lobbying. We post our lobbying policy online and we discuss political
contributions annually with AEP’s Board of Directors’ Committee on Directors and
Corporate Governance. . . .
We believe in transparency and active participation in public debate. Our
experience is that open, candid discussion and a good-faith attempt to reach
common ground is the best way to do business.

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(Emphasis added.)
58.

On July 25, 2019, AEP filed its quarterly report on Form 10-Q with the SEC for the

period ended June 30, 2019 (the “2Q 19 10-Q”) which was signed by Defendant Buonaiuto.
Attached to the 2Q 19 10-Q were certifications pursuant to SOX signed by Defendants Akins and
Tierney attesting to the accuracy of the financial statements and the disclosure of all fraud.
59.

The 2Q 19 10-Q stated the following regarding HB6:

In July 2019, clean energy legislation which offers incentives for power-generating
facilities with zero- or reduced carbon emissions was signed into law by the Ohio
Governor. The clean energy legislation phases out current energy efficiency and
renewable mandates after 2020 and 2026, respectively. The bill also provides for
the recovery of existing renewable energy contracts on a bypassable basis through
2032 and includes a provision for recovery of certain legacy generation resources
which will be allocated to all electric distribution utilities on a non-bypassable
basis. Management is analyzing the impact of this legislation and at this time
cannot estimate the impact on results of operations, cash flows or financial
condition.
60.

On September 10, 2019, AEP issued a press release entitled “AEP Accelerates

Carbon Dioxide Emissions Reduction Target” which touted the Company’s strategy on cleaner
energy stating:
COLUMBUS, Ohio, Sept. 10, 2019 - American Electric Power (NYSE: AEP) is
cutting carbon dioxide emissions faster than anticipated and has revised its 2030
reduction target to 70 percent from 2000 levels. The company’s previous target
was a 60 percent reduction from 2000 levels by 2030.
AEP also is confident that it will cut carbon dioxide emissions by more than 80
percent from 2000 levels by 2050.
“AEP’s overall strategy is focused on modernizing the power grid, expanding
renewable energy resources and delivering reliable energy to our customers. Our
transition to a cleaner, more balanced resource mix helps mitigate risk for our
customers and shareholders alike and will ensure a more resilient and reliable
energy system into the future,” said Nicholas K. Akins, AEP chairman, president
and chief executive officer.
“We’ve made significant progress in reducing carbon dioxide emissions from our
power generation fleet and expect our emissions to continue to decline. Our
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aspirational emissions goal is zero emissions by 2050. Technological advances,
including energy storage, will determine how quickly we can achieve zero
emissions while continuing to provide reliable, affordable power for customers,”
Akins said.
AEP will achieve future carbon dioxide emissions reductions through a variety of
actions including investments in renewable generation, investments in transmission
and distribution technologies to enhance efficiency, and expanded demand
response and energy efficiency programs.
AEP’s resource plans include adding more than 8,600 megawatts (MW) of new
wind and solar generation to serve the company’s regulated utility customers by
2030. . . .
AEP also is investing in renewable energy in competitive markets. Between 2019
and 2023, the company plans to invest approximately $2.2 billion in contracted
renewables and renewables integrated with energy storage. AEP already added
1,302 megawatts of contracted renewables to its portfolio this year.
To enhance the efficiency and resiliency of the energy delivery system, AEP’s
long-term strategy includes plans to invest approximately $25 billion over the
next 5 years in its transmission and distribution systems.
AEP has factored future carbon regulations into the company’s evaluation of
generation resource options for many years and will continue to do so. The
company already has cut its carbon dioxide emissions by 59 percent since 2000.
AEP’s generation capacity has gone from 70 percent coal-fueled in 2005 to 45
percent today. Its natural gas capacity increased from 19 percent in 2005 to 28
percent today, and its renewable generation capacity has increased from 4 percent
in 2005 to 17 percent today.
(Emphasis added.)
61.

On September 16, 2019, AEP published a newsletter entitled “Regulatory News:

What’s going on with PJM’s BRA and House Bill 6?” which explained HB6 and its connection to
the Company, in pertinent part, in the following:
What is Ohio’s HB 6?
When initially introduced, the purpose of the legislation was for all Ohio electricity
customers to pay to keep open Lake County’s Perry and Ottawa County’s DavisBesse nuclear plants, owned by FirstEnergy Solutions (FES), a subsidiary of
FirstEnergy Corp. However, the goal of the legislation expanded to support
additional renewable energy resources while eliminating certain utility energy
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efficiency activities and renewable portfolio compliance standards. The
expansion to HB 6 came with the expectation that distribution charges would be
reduced by eliminating the energy efficiency rider charge while promoting clean
air resources.
On July 24, 2019, Ohio Governor Mike DeWine signed into law HB 6. This law
creates the Nuclear Generation Fund and the Renewable Generation Fund, to be
administered by the Ohio Air Quality Development Authority. These funds allow
for a “qualifying nuclear resource” or a “qualifying renewable resource” to be
eligible for participation in the programs for one or more program years, as
determined by the Authority.
What’s included in HB 6?
HB 6 essentially contains five main provisions.
1. Establishes a Clean Air Fund to subsidize two nuclear power plants.
2. Renewable Funding Opportunity, which supports pre-qualified solar projects
certificated before June 2019.
3. Ohio Valley Electric Corporation (OVEC) Statewide Recovery Charge,
subsidizing two coal-fired power plants.
4. Reduced Renewable Portfolio Standards (RPS) required by electricity
suppliers.
5. Energy efficiency programs offered by utilities end December 2020.
What are the details of each provision in HB 6?
*

*

*

Renewable Funding Opportunity
HB 6 supports eligible solar facilities over 50MW that already have siting
certification as of June 2019. AEP Ohio has two eligible solar renewable facilities
located in Highland County. These are the Willowbrook project (100MW) and the
Hecate project (300MW).
Through the renewable funding opportunity, a $9 per MWh credit is paid to
project owners of eligible solar facilities for a total of $20 million annually, which
covers about 1,000MW of solar. This credit is assessed from the $20 million
renewable portion of the Clean Air Fund as described above.
OVEC Statewide Recovery
The Ohio Valley Electric Corporation (OVEC) and the Indiana-Kentucky Electric
Corporation (IKEC) are generating stations originally built in the 1950s and
provided electric power for the U.S. Department of Energy’s uranium enrichment
facilities then near Portsmouth, Ohio. Today, OVEC and IKEC own two coal power
plants; Kyger Creek Generating Station (1.1GW) in Cheshire, Ohio and Clifty
Creek Generating Station (1.3GW) in Madison, Indiana. Under HB 6, OVEC and
IKEC will receive subsidies to support their coal-fired power plants.
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Effective January 1, 2020, distribution customers throughout Ohio will incur a
non-bypassable charge, called the Purchased Power Agreement (PPA) Rider.
The rider for residential customers is $1.50 per month. Commercial and
industrial customers’ monthly charge is $1,500 for this rider. The PPA Rider will
begin in 2021 and will be reviewed by the Commission every three years to
determine continuation of the rider, which is to end December 31, 2030.
Reduced Renewable Portfolio Standards
In 2008, the State of Ohio established their Renewable Portfolio Standards (RPS)
policy. This policy required providers selling electricity to consumers to provide a
specific percentage of that supply from renewable sources. Currently, the RPS
policy states 12.5% of your electricity must come from renewable energy sources
by 2027, with 0.5% required to be solar.
HB 6 reduces the RPS target for utilities and competitive retail energy suppliers
to 8.5%, and the solar portion is eliminated by December 31, 2026. This means
that most Ohio customers will see a price reduction by the elimination of RPS
requirements effective January 1, 2027. However, an AEP Ohio customer should
read the section below on the AEP Ohio bypassable renewable legacy charge, as
you will continue to receive this charge through 2032.
(Emphasis added.)
62.

The September 16, 2019, newsletter also stated the following, in pertinent part,

regarding the referendum effort to repeal HB6 – without mentioning the Company’s own actions:
Potential Referendum on Ohio HB 6
Groups are forming a campaign to add a referendum on the November 2020 ballot
to repeal HB 6. Opponents include environmental groups opposed to the
elimination of energy efficiency programs and developers of natural gas-fired
power plants opposed to the subsidy for nuclear generation. These groups are
circulating a petition, seeking 1,000 signatures from registered Ohio voters in hopes
of adding a referendum to the 2020 election.
The petition was approved by the Ohio Attorney General David Yost on August
29, 2019. The next step opponents will take is to obtain approximately 266,000
additional signatures to place the petition on the November 2020 ballot for a vote.
Finally, a majority vote is needed to approve the petition for the repeal of HB 6.
Meanwhile FES [FirstEnergy Solutions Corp., now Energy Harbor Corp.] filed
a challenge to the petition with the Supreme Court of Ohio on September 4,
stating HB 6 is a tax and tax laws are exempt from referendums.

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This petition process will take a long time before being resolved and may create
market uncertainty for everyone at each step of the process. This uncertainty may
impact energy supply plans and strategies for all involved.
(Emphasis added.)
63.

On October 24, 2019, AEP filed its quarterly report on Form 10-Q with the SEC

for the period ended September 30, 2019 (the “3Q 19 10-Q”) which was signed by Defendant
Buonaiuto. Attached to the 3Q 19 10-Q were certifications pursuant to SOX signed by Defendants
Akins and Tierney attesting to the accuracy of the financial statements and the disclosure of all
fraud.
64.

The 3Q 19 10-Q stated the following regarding HB6:

In July 2019, clean energy legislation which offers incentives for power-generating
facilities with zero or reduced carbon emissions was signed into law by the Ohio
Governor. The clean energy legislation phases out current energy efficiency and
renewable mandates no later than 2020 and after 2026, respectively. The bill
provides for the recovery of existing renewable energy contracts on a bypassable
basis through 2032. The clean energy legislation also includes a provision for
recovery of OVEC costs through 2030 which will be allocated to all electric
distribution utilities on a non-bypassable basis. OPCo’s Inter-Company Power
Agreement for OVEC terminates in June 2040. To the extent that OPCo is unable
to recover the costs of renewable energy contracts on a bypassable basis by the end
of 2032, recover costs of OVEC after 2030 or fully recover energy efficiency costs
through 2020 it could reduce future net income and cash flows and impact financial
condition.
(Emphasis added.)
65.

On February 20, 2020, AEP filed its yearly report on Form 10-K with the SEC for

the year ended December 31, 2019 (the “2019 Annual Report”) which was signed by Defendants
Akins, Tierney, and Buonaiuto. Attached to the 2019 Annual Report were certifications pursuant
to SOX signed by Defendants Akins and Tierney attesting to the accuracy of the financial
statements and the disclosure of all fraud.
66.

The 2019 Annual Report stated the following, in pertinent part, regarding HB6:

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In January 2020, provisions enacted as part of Ohio Am. Sub. H.B. 6 went into
effect that replace the PPA rider and enable OPCo to continue recovering the net
cost associated with the ICPA [Inter-Company Power Agreement], including any
additional contractual entitlement received as a result of the FirstEnergy
Solutions (FES) bankruptcy, through 2030.
(Emphasis added.)
67.

On May 6, 2020, AEP filed its quarterly report on Form 10-Q with the SEC for the

period ended March 31, 2020 (the “1Q 20 10-Q”) which was signed by Defendant Buonaiuto.
Attached to the 1Q 20 10-Q were certifications pursuant to SOX signed by Defendants Akins and
Tierney attesting to the accuracy of the financial statements and the disclosure of all fraud.
68.

The 1Q 20 10-Q stated the following regarding HB6:

In July 2019, clean energy legislation which offers incentives for power-generating
facilities with zero or reduced carbon emissions was signed into law by the Ohio
Governor. The clean energy legislation phases out current energy efficiency
including lost shared savings revenues of $26 million annually and renewable
mandates no later than 2020 and after 2026, respectively. The bill provides for the
recovery of existing renewable energy contracts on a bypassable basis through
2032. The clean energy legislation also includes a provision for recovery of
OVEC costs through 2030 which will be allocated to all electric distribution
utilities on a non-bypassable basis. OPCo’s Inter-Company Power Agreement for
OVEC terminates in June 2040. To the extent that OPCo is unable to recover the
costs of renewable energy contracts on a bypassable basis by the end of 2032,
recover costs of OVEC after 2030 or fully recover energy efficiency costs through
2020 it could reduce future net income and cash flows and impact financial
condition.
(Emphasis added.)
69.

On May 20, 2019, AEP released its 2020 Corporate Accountability Report, which

stated the following, in pertinent part, regarding the Company’s regulatory and legislative outlook
and efforts:
At AEP, we never have been more certain of our responsibility to a sustainable
future for our customers, communities and employees. We will continue to take
steps to reduce our carbon footprint, to empower customers and to value and
develop our workforce. Together, our energy and future are truly boundless.

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*

*

*

Public Policy & Issue Management
Similar to other companies, AEP has a public policy strategy that seeks to inform
decisions made by Congress, the Federal Energy Regulatory Commission (FERC),
North American Electric Reliability Corporation (NERC), state legislatures and
regulatory commissions, and Regional Transmission Organizations (RTOs).
AEP’s Policy Advisory Team (PAT), consisting of senior executives across all
business functions and departments, considers policy options on issues of relevance
to the company and supports internal policy analysis and debate. This approach
ensures that AEP is speaking with one voice and that all employees with external
contacts are clear on our policy positions and objectives. Since its inception in May
2017, the PAT has reviewed more than two dozen issues, including 13 in 2019.
*

*

*

Climate & Lobbying
Some stakeholders are asking AEP whether our lobbying practices and the policy
positions taken by trade organizations to which we belong are in alignment with
the Paris Climate Agreement. We believe in transparency and active participation
in public policy development, regardless of the issue or position. Moreover, AEP
is a respected and sought-after voice when it comes to energy policy-related matters
in the U.S.
We report on our public policy positions, annual lobbying and political
contributions, policy on political contributions and trade association
memberships. We post our lobbying policy online and have consistently
acknowledged our intent to participate actively in the political process and in
lobbying activities at the national, state and local levels. At AEP, we must consider
a number of factors when engaging in this arena, as public policy develops through
negotiation and compromise. While many divergent issues are of importance to us,
we cannot invest all of our efforts to focus on a single issue. We are obligated to
deliver safe, reliable, affordable and secure electricity to all of our customers, and
we develop our public policy positions with that in mind.
(Emphasis added.)
70.

The statements contained in ¶¶ 29-69 were materially false and/or misleading

because they misrepresented and failed to disclose the following adverse facts pertaining to the
Company’s business, operations and prospects, which were known to Defendants or recklessly
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disregarded by them. Specifically, Defendants made false and/or misleading statements and/or
failed to disclose that: (1) the Company covertly participated in the “the largest public corruption
case in Ohio history”; (2) the Company secretly funneled substantial funds to Ohio political
organizations and politicians to bribe politicians to pass HB6, which benefitted the Company and
its coal-fired generation assets; (3) the Company partially funded a massive, misleading
advertising campaign in support of HB6 and in opposition to a ballot initiative to repeal HB6 by
passing substantial sums through a web of dark money entities and front companies in order to
conceal the Company’s involvement; (4) the Company aided in subverting a citizens’ ballot
initiative to repeal HB6; (5) as a result of the foregoing, Defendants’ Class Period statements
regarding the Company’s regulatory and legislative efforts were materially false and misleading;
(6) as a result of the foregoing, the Company would face increased scrutiny; (7) the Company was
subject to undisclosed risk of reputational, legal and financial harm; (8) the bribery scheme would
jeopardize the benefits the Company sought brought by HB6; (9) as opposed to the Company’s
repeated public statements regarding a move to clean energy, it sought a dirty energy bailout; (10)
as opposed to the Company’s repeated public statements regarding protection of its customers’
interests, the Company sought an extra and state-mandated surcharge on its customers’ bills; and
(11) as a result of the foregoing, Defendants’ statements about its business, operations, and
prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant
times.
THE TRUTH EMERGES
71.

On July 25, 2020, the Columbus Dispatch published an article entitled “Columbus

utility giant AEP funded dark money spending in HB 6 campaign” which reported the following
regarding the Company’s actions in connection with the growing scandal:

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A dark-money group wholly funded by House Bill 6 beneficiary and Columbus
utility giant American Electric Power contributed $350,000 toward the
campaigns now at the center of a racketeering and bribery case that ensnared
House Speaker Larry Householder, an investigation by The Dispatch finds.
Empowering Ohio’s Economy Inc., a nonprofit operated solely with AEP funds,
gave $150,000 to Generation Now, another dark-money group that received $60
million from FirstEnergy-related interests to ensure passage and survival of a $1
billion ratepayer bailout of a subsidiary’s pair of nuclear power plants.
Empowering Ohio also gave $200,000 to the Coalition for Opportunity & Growth,
which is related to a similarly named political action committee that spent $1
million in the 2018 campaigns of Householder-favored Republican candidates to
help ensure that he had their votes to become speaker.
An affidavit filed by an FBI agent in the racketeering case details spending of
$350,000 by an unidentified “interest group that was funded exclusively by $13
million from another energy company that supported HB 6.”
A source close to the investigation confirmed to The Dispatch that the energy
company is American Electric Power, a publicly traded company that serves 5.5
million customers in 11 states and earned $2.1 billion last year.
The “social welfare” nonprofit is not required to disclose its donors or the source
of its funding.
*

*

*

AEP benefited from the passage of House Bill 6 with its six-year-plus extension
through 2030 of a monthly surcharge of up to $1.50 on Ohio residential
electricity customers. Industrial and commercial customers can pay up to $1,500
a month. The fee generates about $50 million a year to subsidize a pair of old
coal-burning power plants it partly owns in a consortium with other utilities.
The plants -- Kyger Creek near Cheshire, Ohio, and Clifty Creek near Madison,
Indiana -- were built in the mid-1950s to supply electricity to the former uraniumenrichment plant near Piketon, Ohio. AEP owns the biggest stake in the coal plants
at 43% and buys about 60% of the electricity generated by the plants.
*

*

*

American Electric Power’s political action committee contributed nearly $672,000
to Ohio politicians and parties between 2016 and mid-2020, including $17,250 to
Householder and $86,792 to the House Republicans’ campaign account.

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*

*

*

“I don’t know what they were up to,” Hadden [a board member of AEP’s political
action committee, a lawyer who has represented AEP] said of Generation Now and
Coalition for Opportunity & Growth, adding he did not recall which board member
sought the funding. He said he never discussed the matter with DeWine.
*

*

*

Empowering Ohio’s Economy spent $162,500 on lobbying between 2016 and
2018, according to its tax filings. The group was not registered with the state as
attempting to influence legislation.
The Coalition for Opportunity & Growth, the independent-expenditure political
action committee which received $200,000 from the AEP dark-money group in
2017, the dark-money Coalition & Opportunity PAC that backed Householder
candidates and Generation Now all were incorporated by Eric Lycan, a lawyer and
Republican consultant in Lexington, Kentucky.
While not identified in the affidavit, the Coalition for Opportunity & Growth cash
went largely unused until early this year, when it went out to support Householderblessed candidates in the GOP primary, the FBI affidavit said.
It was laundered through the related PAC to conceal its association with
Generation Now, the FBI affidavit states: “Generation Now had generated
negative media publicity in 2019 and candidates expressed concern to
Householder about their association with it.”
The FBI affidavit said FirstEnergy interests provided $390,000 to the group, which
paid $54,000 to Generation Now, $191,000 to a media-placement firm, $200,000
to a public relations firm and $100,000 to JPL & Associates, a firm controlled by
Jeff Longstreth, Householder’s top political aide. Longstreth is among those
arrested and facing up to 20 years in prison if convicted in the H.B. 6 case.
*

*

*

Householder and four others were arrested Tuesday following an FBI investigation
that captured phone calls, text messages and recordings of meetings centering
around the alleged pay-to-play scheme described by U.S. Attorney Dave DeVillers
as the largest public corruption case in Ohio history.
(Emphasis added.)

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72.

On this news, shares of AEP shares fell $4.79 per share, or over 5%, to close at

$83.26 per share on July 27, 2020, the next trading day, on unusually heavy trading volume,
damaging investors.
73.

As a result of Defendants’ wrongful acts and omissions, and the decline in the

market value of the Company’s common shares, Plaintiff and other Class members have suffered
significant losses and damages.
PLAINTIFF’S CLASS ACTION ALLEGATIONS
74.

Plaintiff brings this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a class consisting of all persons other than Defendants who
purchased AEP securities publicly traded during the Class Period, and who were damaged thereby
(the “Class”). Excluded from the Class are Defendants, the officers and directors of AEP, members
of the Individual Defendants’ immediate families and their legal representatives, heirs, successors
or assigns and any entity in which Defendants have or had a controlling interest.
75.

The members of the Class are so numerous that joinder of all members is

impracticable. Throughout the Class Period, the Company’s securities were actively traded
publicly. While the exact number of Class members is unknown to Plaintiff at this time and can
be ascertained only through appropriate discovery, Plaintiff believes that there are hundreds, if not
thousands, of members in the proposed Class.
76.

Plaintiff’s claims are typical of the claims of the members of the Class as all

members of the Class are similarly affected by Defendants’ wrongful conduct in violation of
federal law that is complained of herein.

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77.

Plaintiff will fairly and adequately protect the interests of the members of the Class

and has retained counsel competent and experienced in class and securities litigation. Plaintiff has
no interests antagonistic to or in conflict with those of the Class.
78.

Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the
questions of law and fact common to the Class are:
•

whether the Exchange Act was violated by Defendants’ acts as alleged herein;

•

whether statements made by Defendants to the investing public during the Class
Period misrepresented material facts about the financial condition and business of
AEP;

•

whether Defendants’ public statements to the investing public during the Class
Period omitted material facts necessary to make the statements made, in light of
the circumstances under which they were made, not misleading;

•

whether the Defendants caused AEP to issue false and misleading filings during
the Class Period;

•

whether Defendants acted knowingly or recklessly in issuing false filings;

•

whether the prices of AEP securities during the Class Period were artificially
inflated because of the Defendants’ conduct complained of herein; and

•

whether the members of the Class have sustained damages and, if so, what is the
proper measure of damages.

79.

A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the
damages suffered by individual Class members may be relatively small, the expense and burden

39

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of individual litigation make it impossible for members of the Class to individually redress the
wrongs done to them. There will be no difficulty in the management of this action as a class action.
80.

Plaintiff will rely, in part, upon the presumption of reliance established by the fraud-

on-the-market doctrine in that:
•

AEP shares met the requirements for listing, and were listed and actively traded
on the NYSE exchange, an efficient market;

•

As a public issuer, AEP filed periodic public reports;

•

AEP regularly communicated with public investors via established market
communication mechanisms, including through the regular dissemination of press
releases via major newswire services and through other wide-ranging public
disclosures, such as communications with the financial press and other similar
reporting services;

•

AEP’s securities were liquid and traded with moderate to heavy volume during the
Class Period; and

•

AEP was followed by a number of analysts who wrote reports that were widely
distributed and publicly available.

81.

Based on the foregoing, the market for AEP securities promptly digested current

information regarding the Company from all publicly available sources and reflected such
information in the prices of the shares, and Plaintiff and the members of the Class are entitled to a
presumption of reliance upon the integrity of the market.
82.

Alternatively, Plaintiff and the members of the Class are entitled to the presumption

of reliance established by the Supreme Court in Affiliated Ute Citizens of the State of Utah v.

40

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United States, 406 U.S. 128 (1972), as Defendants omitted material information in their Class
Period statements in violation of a duty to disclose such information as detailed above.
COUNT I
For Violations of Section 10(b) And Rule 10b-5 Promulgated Thereunder
Against All Defendants
83.

Plaintiff repeats and realleges each and every allegation contained above as if fully

set forth herein.
84.

This Count is asserted against Defendants is based upon Section 10(b) of the

Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder by the SEC.
85.

During the Class Period, Defendants, individually and in concert, directly or

indirectly, disseminated or approved the false statements specified above, which they knew or
deliberately disregarded were misleading in that they contained misrepresentations and failed to
disclose material facts necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading.
86.

Defendants violated §10(b) of the 1934 Act and Rule 10b-5 in that they:
•

employed devices, schemes and artifices to defraud;

•

made untrue statements of material facts or omitted to state material facts
necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading; or

•

engaged in acts, practices and a course of business that operated as a fraud
or deceit upon plaintiff and others similarly situated in connection with their
purchases of AEP securities during the Class Period.

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87.

Defendants acted with scienter in that they knew that the public documents and

statements issued or disseminated in the name of the Company were materially false and
misleading; knew that such statements or documents would be issued or disseminated to the
investing public; and knowingly and substantially participated, or acquiesced in the issuance or
dissemination of such statements or documents as primary violations of the securities laws. These
defendants by virtue of their receipt of information reflecting the true facts of the Company, their
control over, and/or receipt and/or modification of the Company’s allegedly materially misleading
statements, and/or their associations with the Company which made them privy to confidential
proprietary information concerning the Company, participated in the fraudulent scheme alleged
herein.
88.

Individual Defendants, who are the senior officers and/or directors of the

Company, had actual knowledge of the material omissions and/or the falsity of the material
statements set forth above, and intended to deceive Plaintiff and the other members of the Class,
or, in the alternative, acted with reckless disregard for the truth when they failed to ascertain and
disclose the true facts in the statements made by them or other AEP personnel to members of the
investing public, including Plaintiff and the Class.
89.

As a result of the foregoing, the market price of the Company’s securities was

artificially inflated during the Class Period. In ignorance of the falsity of Defendants’ statements,
Plaintiff and the other members of the Class relied on the statements described above and/or the
integrity of the market price of the Company’s securities during the Class Period in purchasing
AEP securities at prices that were artificially inflated as a result of Defendants’ false and
misleading statements.

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90.

Had Plaintiff and the other members of the Class been aware that the market price

of AEP securities had been artificially and falsely inflated by Defendants’ misleading statements
and by the material adverse information which Defendants did not disclose, they would not have
purchased AEP securities at the artificially inflated prices that they did, or at all.
91.

As a result of the wrongful conduct alleged herein, Plaintiff and other members of

the Class have suffered damages in an amount to be established at trial.
92.

By reason of the foregoing, Defendants have violated Section 10(b) of the 1934 Act

and Rule 10b-5 promulgated thereunder and are liable to the plaintiff and the other members of
the Class for substantial damages which they suffered in connection with their purchase of AEP
securities during the Class Period.
COUNT II
Violations of Section 20(a) of the Exchange Act
Against the Individual Defendants
93.

Plaintiff repeats and realleges each and every allegation contained in the foregoing

paragraphs as if fully set forth herein.
94.

During the Class Period, the Individual Defendants participated in the operation

and management of the Company, and conducted and participated, directly and indirectly, in the
conduct of AEP’s business affairs. Because of their senior positions, they knew the adverse nonpublic information about AEP’s misstatement of revenue and profit and false financial statements.
95.

As officers and/or directors of a publicly owned company, Individual Defendants

had a duty to disseminate accurate and truthful information with respect to the Company’s
financial condition and results of operations, and to correct promptly any public statements issued
by the Company which had become materially false or misleading.

43

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96.

Because of their positions of control and authority as senior officers, the Individual

Defendants were able to, and did, control the contents of the various reports, press releases and
public filings which the Company disseminated in the marketplace during the Class Period
concerning AEP’s results of operations. Throughout the Class Period, the Individual Defendants
exercised their power and authority to cause the Company to engage in the wrongful acts
complained of herein. The Individual Defendants, therefore, were “controlling persons” of the
Company within the meaning of Section 20(a) of the Exchange Act. In this capacity, they
participated in the unlawful conduct alleged which artificially inflated the market price of AEP
securities.
97.

By reason of the above conduct, the Individual Defendants are liable pursuant to

Section 20(a) of the Exchange Act for the violations committed by the Company.
PRAYER FOR RELIEF
WHEREFORE, plaintiff, on behalf of himself and the Class, prays for judgment and
relief as follows:
(a)

declaring this action to be a proper class action, designating plaintiff as Lead

Plaintiff and certifying plaintiff as a class representative under Rule 23 of the Federal Rules of
Civil Procedure and designating plaintiff’s counsel as Lead Counsel;
(b)

awarding damages in favor of plaintiff and the other Class members against all

defendants, jointly and severally, together with interest thereon;
(c)

awarding plaintiff and the Class reasonable costs and expenses incurred in this

action, including counsel fees and expert fees; and
(d)

awarding plaintiff and other members of the Class such other and further relief as

the Court may deem just and proper.

44

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JURY TRIAL DEMANDED
Plaintiff hereby demands a trial by jury.

Dated: August 20, 2020

Respectfully submitted,
KARON LLC
/s/ Daniel R. Karon
Daniel R. Karon (OH 0069304)
Beau D. Hollowell (OH 0080704)
700 W. St. Clair Ave, Ste. 200
Cleveland, Ohio 44113
Tel.: 216.622.1851
Fax: 216.241.8175
Email: dkaron@karonllc.com
bhollowell@karonllc.com
Liaison Counsel

THE ROSEN LAW FIRM, P.A.
Phillip Kim, Esq.
Laurence M. Rosen, Esq.
275 Madison Avenue, 40th Floor
New York, NY 10016
Telephone: (212) 686-1060
Fax: (212) 202-3827
Email: pkim@rosenlegal.com
lrosen@rosenlegal.com
Counsel for Plaintiff

45

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Certification and Authorization of Named Plaintiff Pursuant
to Federal Securities Laws
The individual or institution listed below (the "Plaintiff") authorizes and, upon execution
of the accompanying retainer agreement by The Rosen Law Firm P.A., retains The Rosen
Law Firm P.A. to file an action under the federal securities laws to recover damages and
to seek other relief against American Electric Power Company, Inc.. The Rosen Law Firm
P.A. will prosecute the action on a contingent fee basis and will advance all costs and
expenses. The American Electric Power Company, Inc.. Retention Agreement provided
to the Plaintiff is incorporated by reference, upon execution by The Rosen Law Firm P.A.
First name:
Middle initial:
Last name:
Address:
City:
State:
Zip:
Country:
Facsimile:
Phone:
Email:

Diana
L
Nickerson

Redacted

Plaintiff certifies that:

1. Plaintiff has reviewed the complaint and authorized its filing.
2. Plaintiff did not acquire the security that is the subject of this action at the direction
of plaintiff's counsel or in order to participate in this private action or any other
litigation under the federal securities laws.

3. Plaintiff is willing to serve as a representative party on behalf of a class, including
providing testimony at deposition and trial, if necessary.

4. Plaintiff represents and warrants that he/she/it is fully authorized to enter into and
execute this certification.

5. Plaintiff will not accept any payment for serving as a representative party on behalf
of the class beyond the Plaintiff's pro rata share of any recovery, except such
reasonable costs and expenses (including lost wages) directly relating to the
representation of the class as ordered or approved by the court.

6. Plaintiff has made no transaction(s) during the Class Period in the debt or equity
securities that are the subject of this action except those set forth below:
Acquisitions:
Type of Security
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock
Common Stock

Buy Date
02/04/2019
03/04/2019
04/29/2019
10/16/2019
12/23/2019
02/04/2020

# of Shares
500
150
150
300
150
125

Price per Share
79.0664
80.99
83.96
91.7984
94.3499
103.95

 Case: 2:20-cv-04243-SDM-EPD Doc #: 1-1 Filed: 08/20/20 Page: 2 of 2 PAGEID #: 47

Certification for Diana Nickerson (cont.)

7. I have not served as a representative party on behalf of a class under the federal
securities laws during the last three years, except if detailed below. [ ]
I declare under penalty of perjury, under the laws of the
United States, that the information entered is accurate:

YES

By clicking on the button below, I intend to sign and execute
this agreement and retain the Rosen Law Firm, P.A. to
proceed on Plaintiff's behalf, on a contingent fee basis.

YES

Signed pursuant to California Civil Code Section 1633.1, et seq. - and the Uniform
Electronic Transactions Act as adopted by the various states and territories of the
United States.
Date of signing: 08/19/2020

 Case: 2:20-cv-04243-SDM-EPD Doc #: 1-2 Filed: 08/20/20 Page: 1 of 2 PAGEID #: 48

CIVIL COVER SHEET

JS 44 (Rev. 09/19)

The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as
provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the
purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)

I. (a) PLAINTIFFS

DEFENDANTS

DIANA NICKERSON, Individually and On Behalf of All Others Similarly
Situated

(b) County of Residence of First Listed Plaintiff

AMERICAN ELECTRIC POWER COMPANY, INC., NICHOLAS K.
AKINS, BRIAN X. TIERNEY, and JOSEPH M. BUONAIUTO
County of Residence of First Listed Defendant

(EXCEPT IN U.S. PLAINTIFF CASES)
NOTE:

(c) Attorneys (Firm Name, Address, and Telephone Number)

Franklin

(IN U.S. PLAINTIFF CASES ONLY)
IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED.

Attorneys (If Known)

Daniel R. Karon and Beau D. Hollowell, Karon LLC, 700 West St. Clair
Ave., Suite 200, Cleveland, Ohio 44113

II. BASIS OF JURISDICTION (Place an “X” in One Box Only)
’ 1

U.S. Government
Plaintiff

X 3

Federal Question
(U.S. Government Not a Party)

’ 2

U.S. Government
Defendant

’ 4

Diversity
(Indicate Citizenship of Parties in Item III)

III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff
(For Diversity Cases Only)
PTF
Citizen of This State
’ 1

DEF
’ 1

Citizen of Another State

’ 2

’

2

Incorporated and Principal Place
of Business In Another State

’ 5

’ 5

Citizen or Subject of a
Foreign Country

’ 3

’

3

Foreign Nation

’ 6

’ 6

IV. NATURE OF SUIT (Place an “X” in One Box Only)
CONTRACT
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Click here for: Nature of Suit Code Descriptions.

TORTS

110 Insurance
120 Marine
130 Miller Act
140 Negotiable Instrument
150 Recovery of Overpayment
& Enforcement of Judgment
151 Medicare Act
152 Recovery of Defaulted
Student Loans
(Excludes Veterans)
153 Recovery of Overpayment
of Veteran’s Benefits
160 Stockholders’ Suits
190 Other Contract
195 Contract Product Liability
196 Franchise

REAL PROPERTY
210 Land Condemnation
220 Foreclosure
230 Rent Lease & Ejectment
240 Torts to Land
245 Tort Product Liability
290 All Other Real Property

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PERSONAL INJURY
310 Airplane
315 Airplane Product
Liability
320 Assault, Libel &
Slander
330 Federal Employers’
Liability
340 Marine
345 Marine Product
Liability
350 Motor Vehicle
355 Motor Vehicle
Product Liability
360 Other Personal
Injury
362 Personal Injury Medical Malpractice
CIVIL RIGHTS
440 Other Civil Rights
441 Voting
442 Employment
443 Housing/
Accommodations
445 Amer. w/Disabilities Employment
446 Amer. w/Disabilities Other
448 Education

and One Box for Defendant)
PTF
DEF
Incorporated or Principal Place
’ 4
’ 4
of Business In This State

FORFEITURE/PENALTY

PERSONAL INJURY
’ 365 Personal Injury Product Liability
’ 367 Health Care/
Pharmaceutical
Personal Injury
Product Liability
’ 368 Asbestos Personal
Injury Product
Liability
PERSONAL PROPERTY
’ 370 Other Fraud
’ 371 Truth in Lending
’ 380 Other Personal
Property Damage
’ 385 Property Damage
Product Liability
PRISONER PETITIONS
Habeas Corpus:
’ 463 Alien Detainee
’ 510 Motions to Vacate
Sentence
’ 530 General
’ 535 Death Penalty
Other:
’ 540 Mandamus & Other
’ 550 Civil Rights
’ 555 Prison Condition
’ 560 Civil Detainee Conditions of
Confinement

’ 625 Drug Related Seizure
of Property 21 USC 881
’ 690 Other

LABOR
’ 710 Fair Labor Standards
Act
’ 720 Labor/Management
Relations
’ 740 Railway Labor Act
’ 751 Family and Medical
Leave Act
’ 790 Other Labor Litigation
’ 791 Employee Retirement
Income Security Act

BANKRUPTCY
’ 422 Appeal 28 USC 158
’ 423 Withdrawal
28 USC 157
PROPERTY RIGHTS
’ 820 Copyrights
’ 830 Patent
’ 835 Patent - Abbreviated
New Drug Application
’ 840 Trademark
SOCIAL SECURITY
’ 861 HIA (1395ff)
’ 862 Black Lung (923)
’ 863 DIWC/DIWW (405(g))
’ 864 SSID Title XVI
’ 865 RSI (405(g))

FEDERAL TAX SUITS
’ 870 Taxes (U.S. Plaintiff
or Defendant)
’ 871 IRS—Third Party
26 USC 7609

IMMIGRATION
’ 462 Naturalization Application
’ 465 Other Immigration
Actions

OTHER STATUTES
’ 375 False Claims Act
’ 376 Qui Tam (31 USC
3729(a))
’ 400 State Reapportionment
’ 410 Antitrust
’ 430 Banks and Banking
’ 450 Commerce
’ 460 Deportation
’ 470 Racketeer Influenced and
Corrupt Organizations
’ 480 Consumer Credit
(15 USC 1681 or 1692)
’ 485 Telephone Consumer
Protection Act
’ 490 Cable/Sat TV
X 850 Securities/Commodities/
Exchange
’ 890 Other Statutory Actions
’ 891 Agricultural Acts
’ 893 Environmental Matters
’ 895 Freedom of Information
Act
’ 896 Arbitration
’ 899 Administrative Procedure
Act/Review or Appeal of
Agency Decision
’ 950 Constitutionality of
State Statutes

V. ORIGIN (Place an “X” in One Box Only)
’ 1 Original
Proceeding

’ 2 Removed from
State Court

’ 3

Remanded from
Appellate Court

’ 4 Reinstated or
Reopened

’ 5 Transferred from
Another District

’ 6 Multidistrict
Litigation Transfer
(specify)
Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):

’ 8 Multidistrict
Litigation Direct File

15 U.S.C. §§ 78j(b) and 78t(a)

VI. CAUSE OF ACTION Brief description of cause:

Class action on behalf of persons or entities who purchased publicly traded AEP securities
DEMAND $
$100 million+ CHECK YES only if demanded in complaint:

’ CHECK IF THIS IS A CLASS ACTION
VII. REQUESTED IN
UNDER RULE 23, F.R.Cv.P.
COMPLAINT:
VIII. RELATED CASE(S)
(See instructions):
IF ANY
JUDGE
DATE

JURY DEMAND:

DOCKET NUMBER

SIGNATURE OF ATTORNEY OF RECORD

/s/ Daniel R. Karon

08/20/2020
FOR OFFICE USE ONLY
RECEIPT #

AMOUNT

APPLYING IFP

JUDGE

MAG. JUDGE

’ Yes

’ No

 Case: 2:20-cv-04243-SDM-EPD Doc #: 1-2 Filed: 08/20/20 Page: 2 of 2 PAGEID #: 49

JS 44 Reverse (Rev. 09/19)

INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS 44
Authority For Civil Cover Sheet
The JS 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as
required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is
required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of
Court for each civil complaint filed. The attorney filing a case should complete the form as follows:
I.(a)
(b)
(c)

Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use
only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and
then the official, giving both name and title.
County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the
time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land
condemnation cases, the county of residence of the "defendant" is the location of the tract of land involved.)
Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting
in this section "(see attachment)".

II.

Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions be shown in pleadings. Place an "X"
in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below.
United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here.
United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box.
Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment
to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes
precedence, and box 1 or 2 should be marked.
Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the
citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity
cases.)

III.

Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this
section for each principal party.

IV.

Nature of Suit. Place an "X" in the appropriate box. If there are multiple nature of suit codes associated with the case, pick the nature of suit code
that is most applicable. Click here for: Nature of Suit Code Descriptions.

V.

Origin. Place an "X" in one of the seven boxes.
Original Proceedings. (1) Cases which originate in the United States district courts.
Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441.
Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing
date.
Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date.
Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or
multidistrict litigation transfers.
Multidistrict Litigation – Transfer. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C.
Section 1407.
Multidistrict Litigation – Direct File. (8) Check this box when a multidistrict case is filed in the same district as the Master MDL docket.
PLEASE NOTE THAT THERE IS NOT AN ORIGIN CODE 7. Origin Code 7 was used for historical records and is no longer relevant due to
changes in statue.

VI.

Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional
statutes unless diversity. Example: U.S. Civil Statute: 47 USC 553 Brief Description: Unauthorized reception of cable service

VII.

Requested in Complaint. Class Action. Place an "X" in this box if you are filing a class action under Rule 23, F.R.Cv.P.
Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction.
Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded.

VIII. Related Cases. This section of the JS 44 is used to reference related pending cases, if any. If there are related pending cases, insert the docket
numbers and the corresponding judge names for such cases.
Date and Attorney Signature. Date and sign the civil cover sheet.