NuScale Power: Faces Securities Fraud Lawsuit Over ENTRA1 Partnership

• A NuScale Power shareholder has filed a lawsuit alleging federal securities law violations by the company's board and officers.
• The suit claims NuScale misrepresented a critical partnership with ENTRA1 Energy, which allegedly lacked experience in nuclear projects.
• NuScale reportedly committed to paying ENTRA1 approximately $500 million linked to a nonbinding agreement with the TVA.
• Management eventually conceded ENTRA1's lack of relevant experience during a November 2025 earnings call.
• NuScale's stock price fell by approximately 70% from its March high following these events.

The shareholder's complaint highlights that NuScale essentially 'bet its commercialization strategy, and hundreds of millions of dollars, on one untested, understaffed partner with zero experience in nuclear power,' leading to another drop in NuScale's stock price.

A federal securities class action lawsuit, *Truedson v. NuScale Power Corporation et al.*, is ongoing against NuScale Power, a developer of small modular reactor technology, along with its board and officers. The lawsuit, which covers investors who purchased NuScale Class A common stock between March 3, 2025, and November 6, 2025, alleges that the company engaged in a scheme to violate federal securities laws by misrepresenting a crucial commercial partnership. Lead Plaintiffs filed an Amended Complaint on July 10, 2026. Harwood contends that NuScale's core technology, the light water reactor NuScale power module, remains uncommercialized, with the company's primary revenue derived from engineering and licensing fees and services. This revenue, according to the shareholder, is insufficient to cover NuScale's overall expenses, making successful commercialization vital for its continued operations.

The lawsuit specifically targets NuScale's promotion of an exclusive commercial partnership with ENTRA1 Energy, which began in March 2025. NuScale reportedly touted ENTRA1's role in financing, building, and operating nuclear power facilities powered by NuScale's reactors. Harwood claims that NuScale "repeatedly hyped" this collaboration as "critical" for the company and its technology's future. However, the shareholder asserts that this partnership was, in reality, a "farce," given ENTRA1's complete lack of experience in constructing, financing, or operating significant projects, particularly those as technically and regulatorily complex as nuclear energy facilities. This alleged ENTRA1 Energy partnership misrepresentation forms a central pillar of the NuScale Power securities fraud lawsuit.

Despite the partnership's alleged failure to materialize by late 2025, leading to a decline in NuScale's stock value, the company purportedly continued to endorse its collaboration with ENTRA1. A significant development occurred in September 2025 when ENTRA1 announced an agreement with the Tennessee Valley Authority (TVA) to develop nuclear power plants utilizing NuScale's technology. On the very same day, NuScale publicly declared a partnership milestone agreement with ENTRA1. Under this arrangement, NuScale committed to paying ENTRA1 in installments, including a substantial payment of approximately $500 million directly linked to the TVA agreement.

Critically, the TVA agreement itself was nonbinding. Harwood argues that this entire arrangement constituted a "bad deal" for NuScale, primarily due to ENTRA1’s then-undisclosed inexperience and inadequate operational capabilities. The shareholder's complaint highlights that NuScale essentially 'bet its commercialization strategy, and hundreds of millions of dollars, on one untested, understaffed partner with zero experience in nuclear power,' leading to another drop in NuScale's stock price. This situation underscores the corporate disclosure litigation risk faced by companies when strategic partnerships are not accurately represented.

The NuScale Power shareholder suit alleges that the individual defendants, comprising NuScale's directors and officers, failed to provide accurate information regarding the true strength and viability of the ENTRA1 partnership. Harwood contends that these individuals, by virtue of their positions, directly or indirectly controlled the alleged wrongful acts and the content of NuScale's various public statements. The lawsuit specifically accuses the company's officers of violating the Exchange Act by submitting false and misleading statements to the U.S. Securities and Exchange Commission (SEC).

A key aspect of the federal securities laws violation NuScale claim is the alleged failure by the defendants to disclose their inadequate oversight of the risks associated with the ENTRA1 partnership. Harwood asserts that these misleading statements improperly influenced shareholders, leading them to vote for the reelection of several board members. The complaint further states that the individual defendants possessed "actual knowledge" of the "fraudulent scheme" and the inadequate maintenance of internal controls, or, at minimum, acted with "reckless disregard for the truth" by causing the company to engage in these improper actions. The Exchange Act NuScale lawsuit emphasizes the duty of corporate fiduciaries to ensure transparent and accurate reporting.

The market's skepticism regarding the ENTRA1 partnership became increasingly evident. During an earnings call in November 2025, financial analysts directly questioned NuScale's management about ENTRA1's qualifications to build, own, and operate energy generation facilities. Harwood claims that, during this call, management ultimately conceded that ENTRA1 indeed lacked the relevant experience for such complex undertakings.

Following this earnings call and the admission of ENTRA1's inexperience, NuScale's stock price experienced another significant decline. The company's shares reportedly lost approximately 70% of their value from their highest trading price recorded since March of that year. This sharp market reaction highlights the severe consequences of alleged misrepresentations regarding critical commercialization efforts and the potential for federal securities laws violation NuScale claims to arise from such disclosures.

This case highlights the significant litigation risk public companies face from shareholders when material information regarding strategic partnerships or financial health is allegedly misrepresented or withheld. Legal and compliance teams should scrutinize public disclosures, particularly those related to critical commercialization efforts and revenue streams, to ensure accuracy and avoid potential federal securities law violations.

Source: Original reporting via Courthouse News Service