NEW YORK, Sept. 30, 2021 /PRNewswire/ -- Pomerantz LLP announces that a Consolidated Class Action Complaint ("Complaint"), containing new allegations and an expanded class definition, has been filed against Raytheon Technologies Corporation ("Raytheon" or the "Company") (NYSE: RTX) and certain of its officers. The Complaint, filed in the United States District Court for the District of Arizona, and docketed under No. CV-20-00468-TUC-JCH, has a class period of February 10, 2016 through October 27, 2020, inclusive (the "Class Period"), and is on behalf of a class consisting of anyone who:
purchased or acquired Raytheon Company (NYSE: RTN) common stock from the beginning of the Class Period on February 10, 2016 until the date the merger between Raytheon Company and United Technologies Corporation was completed on April 3, 2020;
purchased or acquired United Technologies Corporation (NYSE:UTX) common stock from June 10, 2019, the first trading day after the merger was announced, until the date the merger was completed on April 3, 2020; and
purchased or acquired Raytheon Technologies Corporation (NYSE:RTX) common stock from the date the merger was completed on April 3, 2020, until the end of the Class Period on October 27, 2020, inclusive, seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
On July 27, 2021 the Court appointed The State Teachers Retirement System of Ohio as Interim Lead Plaintiff and appointed Pomerantz LLP as Interim Lead Counsel. (Dkt. No. 30). If you are an investor who (1) purchased or acquired Raytheon Company (NYSE: RTN) common stock from the beginning of the Class Period on February 10, 2016 until the date the merger between Raytheon Company and United Technologies Corporation was completed on April 3, 2020; (2) purchased or acquired United Technologies Corporation (NYSE:UTX) common stock from June 10, 2019, the first trading day after the merger was announced, until the date the merger was completed on April 3, 2020; or (3) purchased or acquired Raytheon Technologies Corporation (NYSE:RTX) common stock from the date the merger was completed on April 3, 2020, until the end of the Class Period on October 27, 2020, you have until October 21, 2021 to ask the Court to appoint you as Non-Interim Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Raytheon purports to be an aerospace and defense company providing advanced systems and services for commercial, military, and government customers worldwide. Among the Company's four main operational divisions is its Raytheon Missiles and Defense segment, which designs, develops, integrates, and produces missile and combat systems for the armed forces of the United States and allied nations.
During the class period, Raytheon derived a vast majority of its revenues from contracts it received from the U.S. government. U.S. government contracts are subject to heavy scrutiny and contractors are required to comply with all applicable laws and regulations governing the government's acquisition of goods and services. These laws and regulations impose a broad range of requirements, many of which are unique to government contracting. Failure to comply with these requirements can result in severe repercussions including, but not limited to, reduction to the value of contracts, forfeiture of profits, and bars from future government contracts. Government contractors are also subject to audits and investigations by U.S. government agencies to ensure compliance with contracts. During the Class Period, Raytheon repeatedly engaged in egregious misconduct in relation to its contracts with the U.S. government. The misconduct included several improper practices designed to overcharge the government under existing contracts. Specifically, Raytheon double-charged the government by miscoding labor charges, purchased and mislabeled goods as services to charge a higher markup and avoid certain registration and oversight requirements, and made unnecessary purchases, without the required authority from the government, for materials that were scheduled to arrive after the end date of the task orders. Raytheon also misappropriated funds, failed to submit sub-contracts for competitive bidding, deliberately prolonged projects to inflate Estimates at Completion, and conducted business with foreign companies in direct violation of presidential executive orders. This misconduct resulted in a gross overstatement of many important financial metrics such as revenues, operating income, and operating expenses. Rather than disclose the misconduct, Raytheon concealed it by doctoring contracts in advance of government reviews and audits. This slight-of hand included manipulating dates and other information in the contracts.
The Complaint alleges that, throughout the Class Period, Defendants repeatedly made false and misleading statements regarding the effectiveness of Raytheon's internal controls over financial reporting and disclosure controls and procedures, as well as a number of relevant financial metrics. Contrary to the Defendants' representations to investors, the aforementioned internal controls over financial reporting and disclosure controls and procedures were not effective and did not provide reasonable assurances that transactions were properly executed and/or recorded. Raytheon was not entitled to the benefits of the revenue it generated from its government contracts due to the misuse, misappropriation, and violations of the prescribed protocols and parameters of those government contracts. The material overstatement of reported revenues resulted in the improper reporting of other important financial metrics, like operating income, operating margin, income from operations and net income. The misconduct subjected Raytheon to significant fines and other punitive remedies, in addition to future bars from government contracts.
On October 27, 2020, during after-market hours, Raytheon filed its quarterly report on Form 10-Q with the SEC for the quarter ended September 30, 2020 (the "3Q20 10-Q"). The 3Q20 10-Q announced a criminal investigation by the DOJ into the Company, stating, in pertinent part:
On October 8, 2020, the Company received a criminal subpoena from the DOJ seeking information and documents in connection with an investigation relating to financial accounting, internal controls over financial reporting, and cost reporting regarding Raytheon Company's Missiles & Defense business since 2009. We are cooperating fully with the DOJ's investigation. At this time, the Company is unable to predict the outcome of the investigation. Based on the information available to date, however, we do not believe the results of this inquiry will have a material adverse effect on our financial condition, results of operations or liquidity.
On this news, the price of Raytheon shares fell $4.19 per share, or approximately 7%, to close at $52.34 per share on October 28, 2020.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.