In October 2024, Raytheon (which changed its name to RTX in 2023) resolved a DOJ/SEC enforcement action with various prongs: Foreign Corrupt Practices Act, False Claims Act, Arms Export Control Act and the International Traffic in Arms Regulations.
The net $361.2 million FCPA enforcement action (net $259.7 million DOJ FCPA enforcement action and a net $101.5 million SEC FCPA enforcement action) concerned a bribery scheme involving a high-level official at the Qatar Emiri Air Force to obtain or retain business.
As a condition of settlement, the deferred prosecution agreement stated:
“because certain of the Company’s compliance enhancements are new and have not been fully implemented or tested to demonstrate that they would prevent and detect similar misconduct in the future, and because certain key elements of the Company’s compliance program are still in development, the [DOJ has] determined that the imposition of a Monitor is necessary to reduce the risk of recurrence of misconduct …”
One might have thought that an actual monitor would soon follow.
However, according to the company’s recent filing, a monitor “is expected to be in place by the end of the first quarter.”
The filing states:
“As previously disclosed, on October 15, 2024, Raytheon Company entered into a deferred prosecution agreement (DPA) (DPA-1) with the DOJ and on October 16, 2024, the Company became subject to an administrative order issued by the Securities and Exchange Commission (SEC) (the SEC Administrative Order) to resolve the previously disclosed criminal and civil government investigations into payments made by Raytheon Company and its joint venture, Thales-Raytheon Systems (TRS), since 2012 in connection with certain Middle East contracts. On October 16, 2024, Raytheon Company also entered into a DPA (DPA-2) and a False Claims Act (FCA) settlement agreement with the DOJ to resolve previously disclosed criminal and civil government investigations into defective pricing claims for certain legacy Raytheon Company contracts entered into between 2011 and 2013 and in 2017. Under DPA-1, DPA-2, and the SEC Administrative Order, Raytheon Company and the Company are required to undertake certain cooperation and disclosure obligations (for a term commencing on the effective date of DPA-1 and the SEC Administrative Order, as applicable, and ending three years from the date on which Raytheon Company and the Company engage an independent compliance monitor satisfactory to the DOJ and SEC). A single independent compliance monitor was selected to oversee Raytheon Company’s and the Company’s compliance with their respective obligations under DPA-1, DPA-2, and the SEC Administrative Order, and that monitor is expected to be in place by the end of the first quarter.”
If your scoring at home, the monitor is expected to be place approximately 1.5 years after the resolution documents stated that a monitor was “necessary.”
