top of page
  • Writer's pictureDonald V. Watkins

Southern Company Misleads Wall Street Analyst

Updated: Aug 17, 2023

By: Donald V. Watkins

Copyrighted and Published on February 17, 2023

IMAGE: Angie Storozynski, a Managing Director and Senior Equity Research Analyst at Seaport Global Holdings, LLC, in New York City for U.S. utilities and power companies.

On February 16, 2023, the Southern Company conducted an “earnings call” with seven Wall Street industry analysts. A transcript of the call shows that the Southern Company presented the typical “dog and pony” slide show that reported the company’s finances for 2022 and made financial projections for 2023.


Outgoing CEO Tom Fanning painted a positive picture of the company that was nearly devoid of any mention of Alabama Power Company and its recently ousted CEO, Mark Crosswhite. Fanning made no reference to the controversial Alabama-based political consulting firm Matrix, LLC, and its embattled owner, Joe Perkins.


Initially, Fanning limited his comments regarding Alabama Power to this promotional comment:


“We are proud of the significant role that our subsidiaries play in attracting new businesses to our service territories. And in 2022, Site Selection Magazine named Alabama Power and Georgia Power, Top U.S. utilities for economic development for the fourth consecutive year.”


Ms. Angie Storozynski, a New York City-based Managing Director and Senior Equity Research Analyst at Seaport Global Holdings, LLC, for U.S. utilities and power companies, cut through the Southern Company’s “smoke and mirrors” presentation and asked Fanning this point-blank question:


“[W]e've had some negative [media] headlines around Alabama Power. There's been a change in CEO. And I'm just basically asking if there's any link in those management changes at that subsidiary and those media headlines?


Fanning provided this vague, misleading, and grossly incomplete answer to Ms. Storozynski’s clear, direct, and material question:


“There really wasn't any connection with Mark Crossley (sic), to be honest with you. He had -- I don't know [if] I want to go into all that, but he had some issues he wanted to deal with. It was reasonably clear that he wasn't a contender as a successor here, and I think he decided to retire. That was kind of his choice at the end of the day.”


With this vague, misleading, and grossly incomplete answer, Ms. Storozynski moved on to another subject.


The Southern Company’s Failure to Timely Disclose its Regulatory and Law Enforcement Issues to Shareholders and Industry Analysts Has Evolved Into a Pattern and Practice of Concealment Conduct.


Ms. Storozynski provided Tom Fanning and the Southern Company with an opportunity to come clean with respect to the growing scandal that has plagued the Southern Company, Alabama Power Company, Mark Crosswhite, and Georgia Power in recent months because of their longstanding business relationship with Matrix and Joe Perkins.


Instead of coming clean with Ms. Storozynski, Fanning and the other two Southern Company executives on the call -- Scott Gammill, Vice President, Investor Relations & Treasurer, and Dan Tucker, Chief Financial Officer – withheld a full, accurate, and complete answer to Ms. Storozynski's direct question. In lieu of transparency, they stuck with a pre-planned script of concealing the regulatory and law enforcement problems associated with Alabama Power Company, Mark Crosswhite, Matrix, and Joe Perkins.


Soon-to-be Southern Company CEO Chris Womack, who is Georgia Power’s present CEO and the Southern Company's new President, was on the conference call. However, Womack’s comments were limited to perfunctory remarks about how excited he was to succeed Fanning as CEO in March. Later in the call, Womack provided a short answer to a question about the fuel load for Vogtle Unit 4.


During the earnings call, the Southern Company never mentioned the fact that the company is the subject of several pending racketeering complaints filed with the U.S. Department of Justice’s Criminal Division on January 27, 2023.


Likewise, the Southern Company never mentioned that several formal complaints against two of its wholly-owned affiliates were lodged with the U.S. Nuclear Regulatory Commission (NRC) on February 3, 2023. The complaints challenge the "fitness" of these affiliates to hold licenses to own and operate the Vogtle Nuclear Power Plant.


Even though Tom Fanning and Dan Tucker provided detailed information about the delays in commissioning Vogtle Nuclear Units 3 and 4, they skillfully skirted around any mention of these complaints.


During the call, Fanning bragged about the Southern Company’s great relationship with the NRC. According to Fanning,


“We've been in constant contact with the NRC ….. I think that we continue to work hand in glove with those guys. You should understand that the working relationship with all of the external parties, whether it's the NRC or whether it's the state commission or DOE, anybody. We all sit in the same meetings. We all see the same stuff. We have and complete transparency and everything we do on that side.”


Prior to the February 16th earnings call, the Southern Company issued four Form 8-Ks in 2023. None of these U.S. Securities and Exchange Commission (SEC) filings disclosed the regulatory and law enforcement problems arising from the Southern Company’s, Alabama Power's, and Georgia Power's business relationship with Matrix and Perkins.


The Southern Company Joins Enron, WorldCom, and HealthSouth in Concealing Material Information from Shareholders and Industry Analysts.


Strangely, the Southern Company’s pattern and practice of concealing adverse information of a material nature from its shareholders and Wall Street analysts paves the way for the company to join the ranks of Enron, Worldcom, HealthSouth, and other publicly traded companies that engaged in similar corporate concealment conduct since 2003.


Nothing good ever comes out of corporate concealment conduct where there is a duty to timely disclose material events of an adverse nature.


Interestingly, on January 25, 2023, NextEra Energy (NEE) and Florida Power & Light Company (FPL) filed a Form 8-K with the SEC announcing that “Allegations of violations of law by FPL or NEE have the potential to result in fines, penalties, or other sanctions or effects, as well as cause reputational damage for FPL and NEE, and could hamper FPL’s and NEE’s effectiveness in interacting with governmental authorities.”


The Form 8-K stated that “FPL’s and NEE’s business and reputation could be adversely affected by allegations that FPL or NEE has violated laws, by any investigations or proceedings that arise from such allegations, or by ultimate determinations of legal violations.”


FPL and NEE are also engulfed in a growing Matrix/Perkins-related scandal in Florida. The professional services contracts and special work orders that got Matrix/Perkins in hot water in Florida flourished in Alabama and Georgia under secret contracts with the Southern Company, Alabama Power, and Georgia Power and the payment of millions of dollars "without invoicing" for highly questionable clandestine professional services.


Ironically, Ms. Storozynski downgraded Seaport Global's assessment of NEE stock from "buy" to "neutral" after growing media scrutiny of the shady FPL/NEE/Matrix business relationship occurred in Florida in late July 2022.


What's the Motivation for the Southern Company's Concealment Behavior?


Obviously, Tom Fanning and the Southern Company concealed the adverse and material information regarding Alabama Power, Mark Crosswhite, Matrix, and Perkins from Ms. Storozynski because they did not want to experience a downgrade in Seaport Global's assessment of the Southern Company's stock as a result of the dubious and highly suspect clandestine work that Matrix and Joe Perkins have performed for the Southern Company, Alabama Power, and Georgia Power -- for decades.


What is more, reliable sources closely connected to the Southern Company say that Tom Fanning and his senior management executives believe that President Joe Biden and U.S. Attorney General Merrick Garland are too weak and inept to hold a New York Stock Exchange corporation of the Southern Company’s size and market value accountable for its participation in regulatory violations and criminal conduct of any kind or nature. Fanning and his sycophants reportedly believe the Southern Company falls within the Department of Justice’s unofficial category of Wall Street companies that are “too big to prosecute.”


Finally, Southern Company executives find solace in the fact that Attorney General Garland failed to prosecute Wells Fargo Bank or any of its executives last December for ripping off the bank's customers in Wells Fargo's latest nationwide crime spree, even though the Bank’s rap sheet evidences an unrelenting spree of 229 major federal criminal and civil offenses since 2000. From 2000 to 2020, Wells Fargo had paid more than $22 billion in fines and penalties for the privilege to rip off its bank customers without criminal consequences. The bank's December 2022 fine added another $3.7 billion to this $22 billion figure. Eventually, Wells Fargo's bank customers are forced to pony up the billions of dollars the bank uses to pay its fines and penalties.


Fanning and his company Southern Company executives just might be right in their collective assessment that Joe Biden and Merrick Garland do not have the backbones needed to enforce criminal laws against big Wall Street corporations.


1 Comment

Rated 0 out of 5 stars.
No ratings yet

Add a rating
Jimmybob63
Feb 17, 2023

Word salad response. He had nothing to do with all the Matrix doings in Alabama…..ughhh. Gives away his hand throwing him under the bus at the same time. Certainly she didn’t miss that. Her follow up should have been and what of this internal investigation.

Like
bottom of page