SYSTEMS

SEC claims former Constellation employee made $1.4M trading options before the restart deal was announced

A former Constellation Energy engineer has been accused of making $1.4 million from insider trading ahead of the company's announcement that it would restart a reactor at Three Mile Island to supply power to Microsoft.

The Securities and Exchange Commission (SEC) and federal prosecutors allege in their lawsuits that Casey Muggleston purchased share options based on knowledge officially deemed material non-public information (MNPI).

In September 2024, Microsoft and Constellation Energy – which owns the Three Mile Island facility – signed a 20-year power purchase agreement to bring TMI Unit 1 back online after it was retired in 2019. Earlier this month, the Nuclear Regulatory Commssion made a preliminary finding [PDF] that the proposed restart would not significantly affect the environment. The assessment remains subject to public comment and a final determination.

Should the plant reopen, Microsoft has agreed to purchase energy from it at a predetermined price amid escalating demand for power-hungry cloud and AI services.

According to a filing in the US District Court for the District of Delaware, Muggleston knew he was barred from trading on MNPI or buying options in Constellation stock.

The criminal indictment claims that in May 2024, he became aware of the plan for the company to restart the Three Mile Island reactor through his work as a nuclear engineer at Constellation.

He "exploited that MNPI in violation of the duties of trust and confidence owed to the energy company and its shareholders," the filing alleges, through a series "call options" on company shares between June and September for a total of around $66,595.

In July 2024, directors authorized the $1.5 billion restart project. On September 20, the company issued a public statement about its plans to reopen the facility, along with Microsoft's involvement. The company's shares started the day trading at $181.80 and ended the day at $254.98.

"After the announcement, Muggleston sold all his Constellation call options. In so doing, he made approximately $1.4 million," the SEC filing said.

The SEC also said that the engineer "continued to express an interest in trading on material nonpublic information in violation of his duty to Constellation."

Representatives of the parties are not responding to requests for comment.
In the federal case, taking place in Wilmington, Delaware, Muggleston is set to make an appearance on July 2 before Judge Sherry R Fallon. ®