Former FPL CEO sold $5.4 million in company stocks as ties to political scandals became public

Former Florida Power & Light CEO Eric Silagy made $5.4 million by unloading his company’s stock as ties between the utility and political consultants who orchestrated a controversial, 2020 “ghost candidate” scheme were spilling out into the public, a new lawsuit alleges.

The lawsuit, filed by a group of investors who purchased securities in FPL’s parent company homes in on Silagy’s sale of 62,480 shares of the utility’s stock in December 2021, the largest number of shares he had bought or sold since becoming an officer for the company in 2012.

FPL executives initially denied knowledge of the ghost candidates, but when the company finally acknowledged the allegations, the stock price slid markedly.

The suit was filed in federal Southern District of Florida by people who acquired securities in the parent company, NextEra Energy, between Dec. 2, 2021, the day that Silagy made the sale, and Jan. 30, 2023, shortly after NextEra announced Silagy’s departure from the company.

Since 2021, the Orlando Sentinel has reported extensively on political tactics employed by consultants working for Alabama-based Matrix LLC,  including funding ads promoting three independent “ghost” candidates who ran for highly competitive state Senate seats but did not campaign for office. The scheme apparently was intended to help Republicans win those seats in 2020 by siphoning away votes from the Democrats in those races, including one in Central Florida.

Five people have been criminally charged in connection to the scheme, including two of the ghost candidates. No one at FPL has been accused of wrongdoing by authorities and the company has said an internal review cleared its employees.

The connections between the utility and the consultants began to become public in mid-2021, when Matrix sued the now-former consultants, accusing them of conspiring with a client to cheat the firm out of fees, the Sentinel reported. The lawsuit didn’t identify that client by name but said it was a publicly traded company based in Juno Beach. Based on Securities and Exchange Commission records, NextEra Energy was the only publicly traded company with headquarters in the small Palm Beach County town, the Sentinel reported.

On Sept. 2, 2021, a little more than a month after the civil suit against the Matrix consultants was filed, Silagy indicated he planned to sell 62,480 shares of NextEra stock on Dec. 1, according to an SEC filing.

The suit targeting Silagy, FPL, NextEra, and other utility executives zeroes in on the date of the sale, noting that it was one day before the Sentinel published a story showing FPL had given more than $10 million to dark-money groups controlled by the Matrix consultants in recent years. That story largely was based on records anonymously delivered to the Sentinel in late 2021.

The timing and size of the sale were “unusual and suspicious,” the attorneys representing the plaintiffs wrote in the complaint, which notes that Silagy would have known about the story because he was asked to provide comment.

But Chris McGrath, a spokesman for NextEra who responded to a message left for an attorney representing Silagy and the other defendants, noted that Silagy had indicated he planned to sell the stock 90 days in advance. They also said the sale was in accordance with U.S. Securities and Exchange Commission rules that allow insiders who want to sell company stock to set up a plan that specifies the share price, amount to be sold, and transaction date in advance.

Christopher Gold of Wesley Chapel, the lead attorney representing the plaintiffs, didn’t respond to messages seeking comment.

Silagy left FPL earlier this year. The same day that NextEra Energy announced Silagy’s planned retirement, the company acknowledged the political scandals in a notice sent to investors which revealed alleged violations of federal campaign laws were the subject of a complaint with the Federal Elections Commission.

The company added it could not “provide assurance that any of the foregoing will not result in the imposition of material fines, penalties, or otherwise result in other sanctions or effects,” in the filing.

NextEra’s stock price plunged 8.7% on this news, decreasing investor value by $14 billion, the suit notes, the largest one-day decline in the last 25 years, “other than major market moving events,” like the Global Financial Crisis and the Covid-19 pandemic.

Investors like the plaintiffs who purchased NextEra stock, the complaint alleges, “after defendants’ false statements which attempted to cover-up FPL’s possible role in the scandal, were harmed when the truth emerged,” in the SEC filing.

The City of Hollywood Police Officers’ Retirement System and the Pembroke Pines Firefighters & Police Officers Pension Fund have asked to become the lead plaintiffs in a class-action suit. They seek damages in an amount to be proven at a jury trial, as well as attorney’s fees and other legal costs.

The suit names NextEra Energy, FPL, and Silagy, as well as former NextEra Energy CEO James Robo and Chief Communications Officer David Reuter, as defendants. The second amended complaint, filed earlier this month, alleges the defendants violated provisions of the federal Exchange Act that prohibit misrepresentations and misleading omissions in connection with the purchase or sale of securities.

The ghost candidate scheme was not the only political scandal involving FPL. Leaks from Matrix revealed Silagy at times used a pseudonymous email address to communicate with Matrix operatives, including to receive a proposal in late 2019 for how FPL money could be secretly filtered through a network of entities to make political contributions.

Utility executives also were in close contact with the consultants as they surveilled Florida Times-Union columnist Nate Monroe, who had written critically about FPL’s attempts to sway Jacksonville City Council members as it tried to acquire the city-owned utility.