Lockheed Martin Corp. (Lockheed) [corporate website] on Wednesday agreed to pay $19.5 million to settle a fraud class action claim alleging that the advanced technology company misled investors in violation of the Securities Exchange Act of 1934 (Exchange Act) [text, PDF]. Brought by the City of Pontiac General Employees' Retirement System in the US District Court for the Southern District of New York [official websites], the lawsuit contended [complaint, PDF] that Lockheed and several named executives overstated financial prospects and projections for its information technology division in 2009. In particular, the public employees' pension fund alleged that Lockheed and its individual employees used devices and schemes to defraud investors, made untrue and misleading statements, and engaged in what should otherwise be considered fraud and deceit under Sections 10(b) and 20(a) of the Exchange Act. The settlement [Reuters report] now awaits approval in the district court.
Lockheed has faced limited legal scrutiny within the last ten years. In 2005, sixteen firms including Lockheed agreed to pay a $14.9 million [JURIST report] for polluting groundwater in California. There, the settlement was used to reimburse federal and state agencies for investigating and cleaning up a plume of polluted groundwater discovered under Baldwin Park [official website] in 1979. In an espionage case a year earlier, Boeing Corp. [official website] counter-claimed against Lockheed [JURIST report] for making false and misleading statements to the government that went on to hurt Boeing financially.