Edison Drops on Willful Misconduct Allegations in Eaton Fire Case

Edison International shares fell over 3% on Tuesday after short seller Muddy Waters said it had uncovered new information suggesting the utility acted with “conscious” or “willful” disregard in the Eaton Fire.

The investment firm said Edison could face at least $4 billion in fire-related damages, with potential liability reaching about $20 billion if a court determines the firm’s conduct amounted to willful misconduct.

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Muddy Waters said the utility’s Southern California Edison unit failed to fix deficiencies in a wildfire risk model despite allegedly knowing for about five years that it could not adequately account for high-wind conditions.
The unit faces multiple lawsuits alleging its electrical equipment started the Eaton Fire, which ignited on January 7, 2025, in the Los Angeles area.
Edison has previously said it is cooperating with investigations into the cause of the fire and denied negligence or wrongdoing.
Muddy Waters said the utility’s failure to address the modeling issues increased wildfire risks during extreme wind events and was a factor in its assessment of the company’s potential exposure.
Edison International did not immediately respond to a Reuters request for comment.

(Reporting by Menon in Bengaluru; Editing by Vijay Kishore)