BREAKING: NUSCALE UNDER SEC INVESTIGATION BY ENFORCEMENT DIVISION

Hunterbrook Media’s investment affiliate, Hunterbrook Capital, does not have a position in $SMR.

The U.S. Securities and Exchange Commission’s Division of Enforcement is conducting an “active and ongoing” investigation into NuScale Power Corp. (NYSE: SMR), a developer of small modular nuclear reactors, according to the SEC’s July 24 response to an open records request obtained by Hunterbrook Media. 

The company initially did not respond to Hunterbrook Media’s request for comment. After publication, a spokesperson from NuScale wrote in a statement: “We are unaware of any SEC investigation into NuScale or any reason for such an investigation.”

In an initial June 27 response to an open records request, the SEC declined to provide information related to investigations or inquiries into NuScale’s conduct, citing an exemption that protects “records compiled for law enforcement purposes.” 

That decision was later appealed. In response, the SEC’s Assistant General Counsel for Litigation and Administrative Practice wrote that “enforcement staff confirmed the existence of responsive records concerning NuScale Power.” But the agency reaffirmed that those documents were exempt from disclosure as their release “could reasonably be expected to interfere with enforcement activities.” 

“We have confirmed with Division of Enforcement staff that the investigation from which you seek records is still active and ongoing,” the SEC wrote. 

The agency also cautioned that its decision “should not be construed as an indication by the Commission or its staff that any violations of law have occurred.”

NuScale Power, which has positioned itself as a pioneer in small modular reactor technology, has seen its market capitalization more than triple over the past six months to over $2 billion. The company has been promoting its nuclear power technology as a solution to “meet the rapidly growing needs of data centers and AI” — and has called the plants that would use this technology “near-term deployable.” 

But after a decade and a half of research and development, NuScale has yet to commercialize any reactors. In its first-quarter earnings report, the company disclosed less than $1.4 million in revenue compared to a net loss exceeding $48 million — and announced a 28% reduction in its workforce. As of March 31, NuScale had $132 million in cash reserves. 

As previously reported by Hunterbrook Media, the U.S. Nuclear Regulatory Commission raised significant questions about NuScale’s risk mitigation plans for one of its reactor designs. The NRC’s inquiries centered on whether NuScale had adequately justified categorizing certain systems as not being “risk significant,” a classification that determines the level of regulatory oversight and quality assurance measures applied to these systems.

NuScale had told Hunterbrook these requests for additional information were “routine,” claiming it was “misleading to view them as an indicator of a certain outcome.” 

Approval of NuScale’s reactor by the NRC is particularly high-stakes for the company, given that NuScale has indicated it does not anticipate commercializing an earlier, 50-megawatt version of its reactor that was the first SMR to be certified by the NRC. 

In its latest 10-K, NuScale stated: “Any potential inquiry or formal investigation from a governmental organization or other regulatory body, including an inquiry from the SEC … could result in a material diversion of our management’s time and may have a material adverse effect on our business and results of operations.”