District of South Carolina Denies Standing Motion in Securities Action Against Deloitte

On August 7, 2023, the U.S. District Court for the District of South Carolina denied a motion by Deloitte & Touche LLP to dismiss a putative securities fraud class action on the ground that the lead plaintiff, a union-affiliated pension fund, lacked standing to maintain the action.  The case arises from Deloitte’s audits of the financial statements of power utility SCANA Corporation—specifically, allegations that Deloitte falsely issued clean audit opinions on financial statements in which SCANA misrepresented the costs of building a nuclear power plant.  After the court appointed the pension fund as lead plaintiff, Deloitte moved to dismiss the complaint because the fund’s trustees had not properly authorized the fund to participate in the litigation as required under the fund’s governing documents.  The court, however, determined that the individuals who authorized the complaint were not necessarily prohibited from doing so under the relevant documents and that there was no evidence that that the individuals “acted in bad faith or engaged in self-dealing.”  The court thus denied the motion and affirmed its earlier order appointing the fund lead plaintiff.

The case is International Brotherhood of Electrical Workers Local 98 Pension Fund v. Deloitte & Touche LLP, No. 3:19-cv-3304 (D.S.C. Aug. 7, 2023).  Lead plaintiff is represented by Cohen Milstein Sellers & Toll PLLC and Tinkler Law Firm LLC.  Deloitte is represented by Milbank LLP and Moore & Van Allen, PLLC.  The order can be found here.