Raytheon Company has entered into a deferred prosecution agreement with the United States Department of Justice, Criminal Division, Fraud Section, and National Security Division, Counterintelligence and Export Control Section, as well as the U.S. Attorney’s Office for the Eastern District of New York. As part of this agreement, Raytheon Company has acknowledged and agreed to charges filed against it, including one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act of 1977 and one count of conspiracy to violate the Arms Export Control Act and its implementing regulations.
In the FCPA case, Raytheon Company received credit for its cooperation with the investigation, which included providing information obtained through its internal investigation, facilitating interviews with current and former employees, making detailed factual presentations to the Offices, proactively disclosing certain evidence, and engaging experts to conduct financial analyses. The company also received credit for its cooperation and remediation, which included recalibrating third-party review and approval processes, implementing enhanced controls over sales intermediary payments, and hiring empowered subject matter experts to oversee its anti-corruption compliance program and third-party management.
However, it's worth noting that in the initial phases of the investigation, prior to 2022, Raytheon Company was at times slow to respond to the Offices’ requests and failed to provide relevant information in its possession, which resulted in the company withholding relevant material information from the government and giving incomplete and misleading presentations regarding the nature and scope of a relevant third-party intermediary relationship.
For the ITAR case, Raytheon Company also received partial credit for providing cooperation concerning the investigation of the ITAR-related conduct, which included gathering evidence of interest to the National Security Division, making factual presentations concerning the ITAR-related misconduct, and facilitating witness interviews.
As part of the agreement, Raytheon Company and RTX Corporation have agreed to continue to enhance the company’s compliance program and internal controls, including ensuring that the compliance program satisfies the minimum elements set forth in the Corporate Compliance Program under the agreement.
In terms of penalties, Raytheon Company has agreed to pay a criminal penalty of $230,400,000 for the FCPA-related conduct and a financial penalty of $21,904,850 for the ITAR-related conduct. Additionally, the company has agreed to pay a $75,000,000 civil penalty in connection with a resolution with the U.S. Securities and Exchange Commission.
The agreement is effective for a period beginning on the date on which the Information is filed and ending three years from the later of the date on which the Information is filed or the date on which the independent compliance monitor is retained by the Company. The company is also required to cooperate fully with the Offices in any and all matters relating to the conduct described in the agreement until the conclusion of all investigations and prosecutions arising out of such conduct. The market has reacted to these announcements by moving the company's shares -0.5% to a price of $125.55. For the full picture, make sure to review RTX's 8-K report.
