Edison drops as Muddy Waters alleges willful misconduct in Eaton Fire case
EIX•Edison International shares fell more than 3% after short seller Muddy Waters alleged the utility showed willful disregard in the Eaton Fire case. Muddy Waters estimated at least $4 billion in fire-related damages, potentially reaching about $20 billion if a court finds willful misconduct.
1. Potential fire liability
Muddy Waters said Edison could face at least $4 billion in fire-related damages, with potential liability of about $20 billion if a court determines the company’s conduct amounted to willful misconduct.
2. Model allegations
Muddy Waters alleged Southern California Edison failed to fix deficiencies in a wildfire risk model despite knowing for about five years that it could not adequately account for high-wind conditions. The firm said the modeling issues increased wildfire risks during extreme wind events and informed its estimate of potential exposure.
3. Edison response
Multiple lawsuits allege the utility’s electrical equipment started the Eaton Fire, which ignited on January 7, 2025, in the Los Angeles area. Edison has said it is cooperating with investigations into the fire’s cause and denied negligence or wrongdoing.
