Over SCANA Audits
A federal judge granted preliminary approval to a $34 million settlement of an investor lawsuit accusing Deloitte of issuing misleading audit reports about the progress of a massive South Carolina nuclear energy expansion, ignoring red flags about fraudulent numbers that would doom the project.
IN THIS ISSUE:
Fraud Lawsuit against Owner of Square and Cash App Clears Major Hurdle PAGE 5
Team Profile: Benjamin D. Brown PAGE 9
Fiduciary Focus: Resolved in the New YearāBetter Governance PAGE 11
Deloitte Settles Shareholder Suit Over SCANA Audits
A federal judge granted preliminary approval to a $34 million settlement of an investor lawsuit accusing Deloitte of issuing misleading audit reports about the progress of a massive South Carolina nuclear energy expansion, ignoring red flags about fraudulent numbers that would doom the project.
Reached on behalf of shareholders in SCANA Corp., a regulated South Carolina utility that was sold in 2018 after exposure of the fraud left the company in shambles, the settlement marked a rare victory for investors seeking to hold independent auditors accountable under the heightened liability standards of federal securities laws. It was among the top five auditor settlements of the last decade and the only auditor settlement in which the company didnāt restate its financials. Deloitte had been SCANAās auditor for more than 70 years.
The settlement with Deloitte was among the top five auditor settlements of the last decade and the only auditor settlement in which the audited company didnāt restate its financials.
Cohen Milstein represents lead plaintiff International Brotherhood of Electrical Workers Local 98 Pension Fund as sole lead counsel in the lawsuit, which stems from a planned $9 billion expansion of the Virgil C. Summer Nuclear Station in Jenkinsville, South Carolina. In what is considered the largest fraud in South Carolina history, three corporate executives were convicted for deceiving shareholders, regulators, and ratepayers about mounting costs and delays that disqualified the company for vital tax credits. In issuing the false and misleading audit reports, plaintiffs alleged, Deloitte breached its duties as SCANAās independent auditor under Sections 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 by repeatedly violating its professional responsibilities.
Specifically, investors claimed that Deloitte failed in its role of gatekeeper, deceiving investors about SCANAās accounting for the project. Investors claimed that Deloitte gave unqualified, ācleanā audit reports on SCANAās financial statements and internal controls over financial reporting, misleading investors into believing that SCANA would complete the nuclear project in time to obtain $1.4 billion in nuclear tax credits. Deloitte did so despite possessing voluminous evidence that SCANA could not possibly achieve this goal. Investors also allege that had it not been for Deloitteās signoff on SCANAās materially false and misleading
Richard Lorant Director of Institutional Client Relations
financial statements, Lead Plaintiff and the Class would not have purchased their SCANA shares, and certainly not at the prices they paid.
The lawsuit stems from the planned expansion of a South Carolina nuclear plantāa project that was eventually abandoned after exposure of one of the largest frauds in state history.
The original suit was filed in 2019 in the U.S. District Court for the District of South Carolina on behalf of investors who acquired SCANA stock between February 26, 2016 through December 20, 2017 and were damaged by the alleged fraud. In November 2020, Judge Margaret B. Seymour denied Deloitteās motion to dismiss, holding that āeven under the heightened standards applicableā in auditor cases, the shareholders plausibly alleged that Deloitte āhelped conceal the fraud from investors by blessingā SCANAās financial statements, which misrepresented the true status of the project and ācontinued to reassure investors that the project would be completed in time, even though they knew this information was false.ā
The court certified the class in November 2024. The case is International Brotherhood of Electrical Workers Local 98 Pension Fund et al. v. Deloitte & Touche, LLP and Deloitte LLP, 19cv03304 (D.S.C.).
Richard E. Lorant is the firmās Director of Institutional Client Relations.
Fraud Lawsuit against Owner of Square and Cash App Clears Major Hurdle
On January 6, 2026, Judge NoĆ«l Wise of the U.S. District Court for the Northern District of California denied a motion to dismiss securities fraud claims against Block, Inc.āthe parent company of Square and Cash Appā and senior executives Jack Dorsey and Amrita Ahuja, allowing investorsā claims that Block misled the market about Cash Appās compliance practices and user metrics to proceed.
Judge Wise held that plaintiffs sufficiently alleged that Block misled shareholders about the strength of its compliance program and the size of Cash Appās user base. As lead counsel, Cohen Milstein represents lead plaintiffs, a group of New York City pension funds, on behalf of investors who purchased Block stock between February 26, 2020, and May 1, 2025.
The lawsuit focuses on alleged misstatements and omissions about Cash App, Blockās flagship mobile payments platform and a central driver of the companyās growth and valuation. Cash App allows users to send and receive money, invest, and access financial services through a single mobile phone app.
Plaintiffs allege that Block intentionally underinvested in antimoney-laundering, know-your-customer, and sanctions compliance to make Cash App easy to join and use and to fuel rapid growth, all the while assuring investors that its compliance program was robust and highly effective. According to the complaint, this approach led to large backlogs of unreviewed alerts and allowed many known bad actors to create large numbers of accounts used to facilitate illicit activities.
bjackson@cohenmilstein.com
Plaintiffs allege that Block intentionally underinvested in anti-money-laundering and sanctions compliance to make Cash App easy to join and use and to fuel rapid growthāall the while assuring investors that its compliance program was robust and highly effective.
Plaintiffs also allege that Block overstated Cash Appās user growth by failing to disclose the extent of duplicate, fraudulent, and illicit accounts. When increased regulatory scrutiny later forced Block to tighten its compliance controls, the company allegedly changed how it calculated user metrics without fully informing investors, leading investors to make misleading comparisons between earlier and later figures and to overestimate Cash Appās growth rate.
kjewler@cohenmilstein.com
Block, Dorsey, and Ahuja moved to dismiss the complaint. Judge Wise denied the motion, emphasizing that even statements that are literally true can be misleading if they omit material facts. Based on detailed allegations of chronic underinvestment in compliance, large alert backlogs, and the ease with which prohibited users could rejoin the platform, Judge Wise found it plausible that Blockās repeated claims about proactive anti-fraud efforts misled investors.
In allowing the case to proceed, the judge held that plaintiffs sufficiently alleged that Block misled shareholders about the strength of its compliance program and the size of Cash Appās user base.
The court also upheld plaintiffsā allegations that Blockās statements about Cash Appās user metrics were misleading. Judge Wise found that failing to disclose the prevalence of multiple accounts per user plausibly obscured the true size of Cash Appās user base. The court further rejected defendantsā argument that these statements were mere puffery, concluding they were specific enough for reasonable investors to rely on.
The court also found that plaintiffs adequately alleged scienter as to Jack Dorsey and Amrita Ahuja. According to the order, the complaint plausibly alleges that the executives had access to detailed internal information through board reports, compliance meetings, and employee feedback about duplicate accounts and fraud levels. Those allegations support the inference that Dorsey and Ahuja either knew their public statements were misleading or acted with deliberate recklessness in making them.
Finally, the court held that plaintiffs adequately pleaded loss causation. The complaint alleges that misleading statements about Blockās compliance program allowed bad actors to create multiple accounts, inflating reported user metrics and Blockās stock price. In March 2023, the alleged truth began to emerge with a report by Hindenburg Research, followed by investigations by multiple states and the Consumer Financial Protection Bureau. As these developments unfolded, Blockās stock price fell by 84 percent, from $289 to $46 per share. The court found the connection between the alleged misrepresentations and investorsā losses to be plausible.
The decision reinforces that technology companiesā statements about their compliance practices and user metrics must be grounded in reality. The ruling marks an important step toward accountability and transparency in the fintech and technology sectors, where user growth narratives often play a central role in valuation and market confidence.
The Defendants must now answer the amended complaint and the case moves into discovery, where investors will gain a clearer picture of whether Blockās public disclosures matched internal measurements of growth and compliance.
Benjamin F. Jackson is a partner in the Securities Litigation & Investor Protection practice group. Kay Jewler is a paralegal in the Securities Litigation & Investor Protection practice group.
Team Profile
Benjamin D. Brown | Managing Partner
202.408.4600 | bbrown@cohenmilstein.com
Benjamin D. Brown is managing partner of Cohen Milstein and co-chair of the firmās Antitrust practice. He is widely recognized as one of the nationās leading antitrust litigators. Ben represents businesses, workers, and consumers in cases challenging anticompetitive conductāranging from wage-fixing and price-fixing cartels to monopolization and exclusionary practices that distort markets and harm competition. Ben joined the firm in 2005 from the DOJ, where he served both in the Antitrust Division and as a Special Assistant United States Attorney in the Eastern District of Virginia. For this issue of the Shareholder Advocate, Ben talked with editor Christina Saler.
I grew up in ā¦ Oshkosh, Wisconsin. It is a quintessential smallish Midwestern town with good public schools and a community feel. My alma mater the University of Wisconsin in Madison is not too far from Oshkosh. Iām able to go back to the area twice a year for an annual meeting of college friends to see a Wisconsin football game and then again on July 4th for another gathering of family friends.
I became a lawyer because ā¦ it was something I was always drawn to. Even as a child and teenager I was always concerned with fairness to the point that, in my senior year of high school, I was awarded the āMost likely to complainā superlative. Both my grandfather and father were lawyers which influenced my path, but it was not expected of me to follow them. In fact, when entering college my father encouraged me to branch out. So, I took a wide variety of classes, but I kept coming back to the law.
A highlight of my practice ā¦ has been representing mixed martial artists in an antitrust class action against promoter Ultimate Fighting Championship (UFC) for unlawfully achieving market dominance that locked artists into unfair, low-paying contracts. We litigated the case for years before settling. This case was so different from my other antitrust cases because it wasnāt about a commercial product but rather real peopleās livelihoods. During the many years of litigation, I had the opportunity to meet in person with the mixed martial artists and their families to hear firsthand how the UFC had caused financial hardship by not fairly paying these athletes for their hard work. We ultimately settled the case for $375 million, which meant that on average each artist that was part of the class received
$200,000. The judge presiding over the case called these ālife changingā recoveries, which echoed the statements of the class members.
One of my goals as managing partner ā¦ is to encourage collaboration among our practice groups. We have ten diverse practice groups, and each practice group consists of lawyers who have been recognized as elite practitioners in their particular area of the law. This broad-based expertise allows us to look at every case from multiple angles and decide how best to litigate it. For example, the Stock Lending antitrust case involves traded securities, so members of both the antitrust and securities groups bring their expertise to the litigation.
Iām currently watching ā¦ The Night Manager which is best described as a spy thriller. Itās based on a novel written by John le Carre. Tom Hiddleston plays the lead with a strong cast. I just started the second season and so far, itās just as gripping as season one.
Fiduciary Focus: Resolved in the New Yearā Better Governance
Many of us see the start of a new year as a chance to reflect on how we are doing, personally and professionally, and on how we can improve our lives. Pension plan fiduciaries are no different, rededicating themselves to a culture of continual improvement that ensures that they are following best practices in fundamental areas of responsibility like ethics, compliance, fiduciary, and governance.
Cohen Milstein assists public pension plan trustees in fulfilling their fiduciary responsibilities in a variety of ways. Public pension plans have a fiduciary obligation to preserve and manage plan assets in the best interests of the plan participants, adhering to fiduciary standards of prudence and loyalty. This means, for example, that public pension plans have a fiduciary obligation to recover funds lost through investments in public securities as the result of corporate mismanagement and/or fraud. Securities litigation claims are assets of the plan that should be managed like other plan assets such as investments. The lawyers in Cohen Milsteinās Securities Litigation & Investor Protection practice group have assisted trustees in returning billions of dollars to pension plans through litigation.
Suzanne M. Dugan Special Counsel
202.408.4600
sdugan@cohenmilstein.com
Just as it is critically important for public pension plans to invest in companies with good corporate governance because better corporate governance leads to better performance and sustainable growth, so too must public pension trustees be focused on their own internal plan governance.
Fiduciary Duty and Corporate Governance:
Cohen Milsteinās litigators also represent public pension plans, as shareholders of publicly traded companies, in derivative lawsuits that hold accountable corporate leaders who breach their fiduciary duties, harming the company and investors. Often these corporate board members have failed to properly exercise their oversight as directors. In a derivative suit, management and directors pay the damages. But there is another critical aspect to derivative suits: the opportunity for governance reforms that is not present in a typical securities fraud class action suit. Derivative suits are primarily focused on preventing the issues that led to the suit in the first place. With derivative suits, a much broader set of corporate governance reforms can be introduced than is typical with shareholder resolutions.
Fiduciary Duty and Plan Governance:
Just as it is critically important for public pension plans to invest in companies with good corporate governance because better corporate governance leads to better performance and sustainable growth, so too must public pension trustees be focused on their own internal plan governance.
A review of potential improvements to internal plan governance starts with identifying traits of highly effective public pension plan trustees:
They understand their fiduciary duties, and to whom the duties are owed.
ā¢ Highly effective trustees understand their fiduciary duties of prudence and loyalty, and that they owe an exclusive duty to the members and beneficiaries to act solely in their best interest.
They obtain guidance from experts, and pay attention to that guidance.
ā¢ Trustees are not expected to be experts in all areas, from investments to actuarial science to benefit determinations. Rather, fiduciary duty requires that they prudently delegate to appropriate experts.
They engage in effective oversight of those experts, as well as all other aspects of the plan.
ā¢ Trustees must engage in a rigorous review of the information before them. Delegation is not abdication. Highly effective trustees understand that the role of the board is one of oversight and strategic direction, but not micromanagement.
They have formal policies, which they regularly review and update.
ā¢ Fiduciaries are judged by the process in which they engage, not necessarily the results. Documentation of that process helps to demonstrate prudence. And monitoring of policies and procedures is crucial to ensure that these policies and procedures remain prudent, as facts and circumstances may change over time.
They follow their policies and procedures, plan documents, and the law.
ā¢ Itās not enough to have prudent policies on the books, but rather those policies must be followed. Compliance is an integral part of plan governance best practices.
As public pension plan trustees refresh their focus in the new year, the firmās Ethics & Fiduciary Counseling attorneys are ready to provide support to ensure that public pension plan trustees adhere to best practices in their core responsibilities, including ethics, compliance, fiduciary duties, and governance.
Suzanne M. Dugan is Special Counsel at Cohen Milstein and heads the firmās Ethics & Fiduciary Counseling practice group.
Recent Highlights
IN THE NEWS
Investor Arbitration, Class Status, AI Shake Up Securities Bar
Bloomberg Law ā January 2, 2026
Cadence Bank Seeks 1st Nod for $5.25M Data Breach Deal
Law360 ā December 19, 2025
InnovAgeās $27 Million IPO Investor Agreement Gets Court Nod
Bloomberg Law ā December 11, 2025
US Investor Suits Over Foreign-Born Securities Show Law in Flux
Bloomberg Law ā November 26, 2025
New York Pension Funds Ask SEC to Ax Curbs on Investor Suits
Bloomberg Law ā November 6, 2025
Judge Approves $38 Million Class Action Settlement Over Monsanto Merger
Courthouse News ā October 30, 2025
āTicket to Lead Counselā: Hereās How Securities Litigation āRadically Changedā 30 Years After Reform Act
New York Law Journal ā December 22, 2025
30 Years On, PSLRA Debates Still Rage in Securities Cases
Law360 ā December 12, 2025
Syngenta, Corteva Face Class Cert. Bids for $2B In Damages
Law360 ā December 10, 2025
Chancery Says $33M Nikola Deal āMore than Fairā
Law360 ā November 21, 2025
EQT Gets Final OK For $168M Merger Benefits Settlement
Law360 ā November 5, 2025
Deloitte to Pay $34MN Over Audit Work on US Nuclear Fiasco
Financial Times ā October 17, 2025
Oregon Says Judge Was Right to Remand
Coinbase Suit
Law360 ā October 15, 2025
AWARDS & ACCOLADES
Seven Cohen Milstein Partners Named 2026 Lawdragon 500 Leading Lawyers in America
Lawdragon ā Recognizing Benjamin Brown, Agnieszka Fryszman, Leslie Kroeger, Theodore Leopold, Laura Posner, Julie Reiser, and Sharon Robertson ā January 9, 2026
Benjamin Brown & Christine Webber
Named Law360 MVPs
Law360 ā November 11, 2025
Suzanne Dugan Receives SLCS
Distinguished Alumni Award
Saranac Lake Central School ā October 24, 2025
Two Decades of Distinction: Carol V. Gilden Continues Her Chicago Super Lawyers Streak
Super Lawyers ā January 5, 2026
Julie Reiser Named Among Top 250 Women in Litigation ā 2025
Benchmark Litigation ā October 28, 2025
Nine Cohen Milstein Attorneys
Recognized as Super Lawyers & Rising Stars in New York
Super Lawyers ā Recognizing Michael Eisenkraft, Eric Kafka, Christopher Lometti, Laura Posner, and Sharon Robertson as Super Lawyers and Christopher Bateman, Benjamin Jackson, Jared Dummitt, and Aaron Marks as Rising Stars āSeptember 29, 2025
UPCOMING EVENTS
January 26-28 | IBEW/NECA Employee Benefits Conference
Naples, FL ā Molly Bowen
February 11-13 | Louisiana Trustee Education Council Investment Education Symposium
New Orleans, LA ā J.D. Davis, Cristine Turner
February 18-20 | National Association of Public Pension Attorneys Winter Seminar
Nashville, TN ā Luke Bierman, Jay Chaudhuri, Suzanne Dugan, Carol Gilden, and Julie Reiser
February 28 ā March 2 | National Association of State Retirement Administrators Winter Meeting
Washington, DC ā Richard Lorant
March 8-11 | California Association of Public Retirement Systems General Assembly Meeting
Carlsbad, CA ā Richard Lorant and Tom Straw
March 15-17 | County Commissioners Association of Pennsylvania Spring Conference
Harrisburg, PA ā David Maser
April 19ā22 | North Americaās Building Trades Unions Legislative Conference
Washington, DC ā Molly Bowen and Christopher Lomett
February 1-4 | Florida Public Pension Trustees Association Trustee School
Orlando, FL ā Cristine Turner
February 12-17 | National Labor & Management Conference
Hollywood, FL ā Molly Bowen, Christopher Lometti, and Richard Trumka
February 22-24 | National Association of State Treasurers Legislative Conference
Washington, DC ā Jay Chaudhuri
March 4-8 | Building and Construction Trades Council of Greater New York Winter Conference
Hollywood, FL ā Molly Bowen and Christopher Lometti
March 9-11 | Council of Institutional Investors Spring Conference
Washington, DC ā Jay Chaudhuri
March 23-26 | Georgia Association of Public Pension Trustees Annual Conference
Jekyll Island, GA ā Cristine Turner
BOSTON, MA
CHICAGO, IL
Editor: Christina D. Saler
Editorial Team: Richard E. Lorant and Samuel P. Waite
Please contact us with questions or comments at 202.408.4600.
The materials in this edition of the Shareholder Advocate are for informational purposes only. They are not intended to be, nor should they be taken as, legal advice. The opinions expressed herein reflect those of the respective author.
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