Ex-ComEd CEO charged with securities, exchange violations by SEC | Courthouse News Service
Thursday, November 30, 2023
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Ex-ComEd CEO charged with securities, exchange violations by SEC

The securities and exchange allegations mirror criminal charges on which the ex-CEO was convicted this past May.

CHICAGO (CN) — The U.S. Securities & Exchange Commission filed a civil lawsuit in federal court Thursday against Anne Pramaggiore, the disgraced former CEO of Illinois' largest energy utility Commonwealth Edison, known locally as ComEd.

It accuses Pramaggiore — who served as ComEd's CEO between 2012 to 2018 — of violating the Securities Act of 1933 and the Securities Exchange Act of 1934 while pursuing the utility's economic interests, lying to auditors and investors along the way.

"Defendant Anne Pramaggiore, in connection with the purchase and sale of securities, by the use of the means and instrumentalities of interstate commerce and by the use of the mails, directly and indirectly: used and employed devices, schemes and artifices to defraud; made untrue statements of material fact ... and engaged in acts, practices and courses of business which operated or would have operated as a fraud and deceit upon purchasers and sellers and prospective purchasers and sellers of securities," the SEC says in the suit.

The filing comes as Pramaggiore, one of the so-called "ComEd Four," awaits sentencing for her conviction on nine similar criminal charges this past May. Alongside her fellow convicted ex-ComEd insiders John Hooker, Jay Doherty and Michael McClain, both the criminal and new civil charges claim she aided ComEd and its multibillion dollar parent company Exelon bribe former Illinois House Speaker Mike Madigan for favorable legislation between 2011 and 2019, including the 2011 Energy Infrastructure and Modernization Act, also known as the Smart Grid Act, and the 2016 Future Energy Jobs Act.

ComEd reported consistently high-earning years between 2013 and 2019 after both state laws took effect, though an 111-page report published in 2020 by the independent nonprofit Illinois Public Interest Research Group found very few Illinoisans have actually seen the improvements ComEd promised would come with the acts' energy modernization and efficiency plans.

ComEd admitted to the bribery scheme in 2020 in exchange for a relatively light $200 million fine and a deferred prosecution agreement on a single, since-dismissed conversion charge from the Northern Illinois District Attorney's Office.

The office, under the direction of former District Attorney John Lausch, instead pursued extensive criminal charges against Pramaggiore and the rest of the ComEd Four as part of a sweeping anti-corruption investigation with Madigan at its center. The same investigation also implicated multiple members of Chicago's political class, including former Chicago aldermen Ed Burke and Danny Solis and Madigan's ex-Chief of Staff Tim Mapes.

The language of the new case against Pramaggiore echoes that of her criminal indictment. It claims Madigan — once one of the most powerful men in Illinois politics, who served in the state House for 50 years and led it as Speaker for 36 — "exercised total control over which bills came to the floor of the Illinois House for a vote," and that the ex-CEO helped secure jobs and payments for Madigan's allies in exchange for his favor in the Illinois Legislature.

"Under her watch and with her active participation, ComEd and its parent, Exelon Corporation, showered Madigan confederates with over a million dollars in payments. The goal was to ingratiate the Exelon organization to Madigan so he would do its political bidding in Springfield," the SEC says. "The payments were supposedly for services rendered. But Pramaggiore knew those payments bought ComEd and Exelon one thing and one thing alone: Clout. Not legal, lobbying, or consulting services."

Highlighting the 2016 Future Energy Jobs Act, the SEC claims that in the wake of its passage Pramaggiore signed off on falsified ComEd documents in order to surreptitiously pay former Chicago alderman Michael Zalewski Sr., one of Madigan's allies, $5,000 a month for a do-nothing job on the utility's payroll. It further accuses her of pocketing some $100,000 as her personal take from the scheme.

"As a result of Pramaggiore’s misconduct, including her misstatements and omissions, she received a $100,000 bonus to reward her efforts to pass FEJA," the SEC claims.

The suit demands Pramaggiore face another jury trial, even as the scheduled January 2024 sentencing for her criminal conviction looms.

As for other figures tied to Madigan and the ComEd bribery scheme, jurors convicted Mapes last month of lying to a grand jury to protect his old boss. Burke, who is the longest-serving city councilor in Chicago's history, is currently awaiting his federal criminal trial in November on multiple racketeering charges, while Madigan's own federal trial on 23 racketeering, fraud and bribery charges is slated for next April.

Solis received a deferred prosecution agreement on a single bribery charge in exchange for helping the FBI secretly record conversations he had with Burke and Madigan.

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Categories / Business, Financial, Securities

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