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Attorneys for SCANA Corp. asked a federal judge to toss an investor lawsuit filed against the utility company in the wake of the V.C. Summer nuclear cancellation. File/Andrew Brown/Staff

COLUMBIA — Federal law enforcement officials continue to monitor SCANA Corp. and the legal fallout surrounding the company's failed V.C. Summer nuclear project — a sign the utility's current and former executives could still face criminal charges. 

Staff members with the U.S. Attorneys Office sat in on a federal court hearing Monday that will decide whether SCANA, now owned by Dominion Energy, can be sued by its former investors over the abandoned project in Fairfield County. 

The hearing was focused on whether the company, several of its board members and its top three executives misled investors in the lead up to the project's cancellation in July 2017.

For the lawyers in the U.S. Attorneys Office, it offered a prelude to what defenses SCANA's executives might throw up if they are indicted for their handling of the $9 billion project — one of the biggest economic calamities in South Carolina history. 

The presence of the government lawyers is only the latest clue that a federal criminal investigation remains in progress. Federal subpoenas were first issued as far back as September 2017. And last November, an FBI agent and Assistant U.S. Attorney James May watched SCANA's former chief financial officer testify in front of the state's utility regulators. 

Much of the legal risk surrounding the failed nuclear project was lifted from SCANA when the state's Public Service Commission allowed Dominion to take over the company and its subsidiary S.C. Electric & Gas late last year. 

The hearing Monday highlighted the remaining legal and financial liability the company faces. 

Attorneys representing private investors, equity funds and several public retirement plans argued the company and its leaders painted a rosy picture about the project even as it veered off track. In doing so, they argue SCANA artificially maintained its stock price before the company's shareholders lost more than $2 billion following the cancellation. 

"Those losses include South Carolinians who held SCANA stock," said Marlon Kimpson, one of the attorneys for SCANA's investors and a state senator from Charleston. 

At the center of that argument was the Bechtel report, a 2015 audit that highlighted significant problems with construction, oversight and the project's schedule. There were several versions of that audit, but SCANA fought for more than a year to keep their findings hidden. 

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"They paint a very vivid picture of a fraud and a coverup," said John Browne, another attorney representing SCANA's investors. 

The lawyers representing Dominion and SCANA's former officers, however, asked the federal judge to dismiss the class action lawsuit. They collectively argued that SCANA's leaders never misled investors about the true state of the construction project. 

They pointed to statements from SCANA's former executive vice president Steve Byrne in which he told investors there was a large amount of risk with the project. 

"He discussed the risks and the market heard what he was saying," said Matthew Martens, Byrne's attorney. "There was nothing misleading about Mr. Byrne's statements." 

Jonathan Watkins, an attorney for SCANA's former CEO Kevin Marsh, argued that his client was open and honest with the investment community too. Marsh's repeated statements about the project's progress in 2016, Watkins said, were simply "immaterial puffery." 

The attorneys representing SCANA's investors want the lawsuit to move forward. They believe they already have more evidence than similar lawsuits initially do, including the case that followed the Enron scandal in 2001. 

Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.