FirstEnergy Board Must Face Investor Suit Over Bribery Scheme (1)

FirstEnergy Corp.'s directors and officers must face a shareholder derivative suit stemming from their alleged involvement in a bribery, racketeering, and pay-to-play scheme with Ohio politicians, after a federal court in that state found enough support Tuesday for allegations of false or misleading statements or omissions.

The allegations that the leadership misrepresented or failed to disclose FirstEnergy’s participation in the bribery scandal are sufficient to show they acted negligently, the Southern District of Ohio said.

The shareholders also adequately pleaded that misleading proxy statements were an “essential link” in causing harm to FirstEnergy, the court said.

The derivative action seeks ...