January 28, 2021

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Raytheon Technologies discloses US criminal probe over financial accounting in defense business

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Shares of Raytheon Technologies Corp., parent company of jet engine maker Pratt & Whitney, fell...

Shares of Raytheon Technologies Corp., parent company of jet engine maker Pratt & Whitney, fell nearly 7.5% Wednesday after the defense and aviation giant disclosed that its financial accounting is being investigated by the U.S. Department of Justice in a criminal probe.

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In a filing Tuesday with the U.S. Securities and Exchange Commission, the Waltham, Mass.-based company said it received a criminal subpoena from the Justice Department seeking information and documents related to to financial accounting, internal controls over financial reporting and cost reporting at its missiles and defense business since 2009.

“We are cooperating fully with the DOJ’s investigation,” the company said in the filing. “At this time, the company is unable to predict the outcome of the investigation.”

Based on information available so far, Raytheon Technologies said it does not believe the results of the inquiry will have a material adverse effect on its financial condition, results of operations or liquidity. The subpoena was issued Oct. 8, the company said,

Raytheon Co., as it was known before its merger earlier this year with United Technologies Corp., received a subpoena last year from the SEC seeking information in connection with an investigation into possibly improper payments by Thales-Raytheon Systems “or anyone acting on their behalf” in connection with Thales-Raytheon or Raytheon contracts in “certain Middle East countries since 2014,” the company said.

Thales-Raytheon Systems Co. LLC makes aerospace control systems.

Earlier this year, the Department of Justice informed Raytheon Technologies it opened a “parallel investigation,” Raytheon said. It later received another subpoena from the SEC seeking information and documents, the company said.

“Raytheon Co. maintains a rigorous anti-corruption compliance program, is cooperating fully with the SEC’s inquiry and is examining whether there has been any conduct that is in violation of Raytheon Co. policy,” it said.

Shares closed at $52.33, down 7.4%.

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