Shareholder hits NuScale Power with securities suit

The shareholder accuses the nuclear power company's board of misrepresenting its partnership with a reportedly ill-suited company.PORTLAND, Ore. (CN) — A NuScale Power shareholder sued the nuclear power company on Wednesday, accusing its board and officers of violating federal securities laws.NuScale develops small modular reactor technology, but shareholder Thomas Harwood III says the company has yet to commercialize its core technology, the light water reactor NuScale power module. Its primary revenue comes from engineering and licensing fees and services, according to Harwood.That revenue falls short of the company’s overall expenses, making commercialization crucial to NuScale’s continued operations. In March 2025, Harwood says NuScale began touting an exclusive commercial partnership with ENTRA1 Energy, representing that ENTRA1 would finance, build and operate nuclear power facilities powered by NuScale’s reactors.“NuScale repeatedly hyped its commercialization partnership with ENTRA1, presenting it as critical to the company and the future of its [NuScale power module] technology,” Harwood wrote. “However, in reality, NuScale’s partnership with ENTRA1 was a farce.”Harwood says ENTRA1 had never built, financed or operated any significant projects, let alone highly technical and regulatorily complex nuclear energy projects.Despite NuScale’s stock falling by late 2025 as the partnership failed to materialize, Harwood claims the company continued to double down on its partnership with ENTRA1.In September 2025, ENTRA1 announced an agreement with the Tennessee Valley Authority to develop nuclear power plants using NuScale’s technology.The same day, NuScale announced a partnership milestone agreement with ENTRA1 under which it would pay the company in installments, including an approximately $500 million payment tied to the TVA agreement, despite that agreement being nonbinding.Harwood claims the arrangement was a bad deal for NuScale given ENTRA1’s “then-undisclosed inexperience and inadequate operations.”“In essence, the company had bet its commercialization strategy, and hundreds of millions of dollars, on one untested, understaffed partner with zero experience in nuclear power,” Harwood said.NuScale’s stock fell yet again.Harwood says that during an earnings call in November 2025, analysts asked company management whether ENTRA1 had the experience to build, own and operate the energy generation facilities. Management conceded that ENTRA1 lacked relevant experience, he claims.The stock price fell again following the earnings call, losing approximately 70% of its value from its highest trading price since March.Harwood claims the individual defendants, including NuScale directors and officers, failed to disclose accurate information about the strength of the company’s partnership with ENTRA1.“The individual defendants, because of their positions of control and authority, were able to and did, directly or indirectly, exercise control over the wrongful acts complained of herein, as well as the contents of the various public statements issued by NuScale."Harwood accuses the company’s officers of violating the Exchange Act by filing false and misleading statements with the U.S. Securities and Exchange Commission. Specifically, he says the defendants failed to disclose that they were not adequately overseeing risks to the company stemming from its partnership with ENTRA1. Those statements misleadingly led shareholders to vote for the reelection of several board members, Harwood claims.“The individual defendants had actual knowledge that the Company was engaging in the fraudulent scheme set forth herein, and that internal controls were not adequately maintained, or acted with reckless disregard for the truth, in that they caused the company to improperly engage in the fraudulent scheme and to fail to maintain adequate internal controls, even though such facts were available to them,” Harwood wrote.A NuScale spokesperson said the company is focused on executing its business strategy as the industry leader in small modular reactor nuclear technology, noting that it is the only company with a design approved by the U.S. Nuclear Regulatory Commission.“It is not uncommon for a public company to become subject to shareholders lawsuits, and NuScale does not comment on pending litigation,” the spokesperson said in an email. “We are committed to advancing the deployment of our technology and delivering value for our customers, partners and stakeholders.”Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads