Raytheon Co. will be charged by the Securities and Exchange Commission with giving profit forecasts to stock analysts before telling the public in the agency’s first case to enforce Regulation Fair Disclosure,
people familiar with the matter said.
Raytheon will pay no fine in a settlement under discussion between the SEC and the fourth-largest U.S. defense contractor, five people close to the case said. The settlement calls for Raytheon, without admitting to the allegations, to agree to be subject to tougher sanctions if the company breaks the rule in the
future, they said.
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The potential settlement comes 21 months after the SEC enacted the rule, which bars companies from selectively disclosing market-moving news before announcing it. Some securities lawyers said the SEC isn’t pushing for a stiff penalty in enforcing the rule, which was opposed by SEC Chairman Harvey Pitt when he
represented brokerage firms as a private lawyer.
“It’s a slow reaction on the SEC’s part, and a very mild reaction, but it’s probably intended as a first-time reminder to U.S. companies, which are largely complying with the rule,” Southern Methodist University law professor Alan Bromberg said.
The SEC may announce the settlement, which is still subject to change, as early as next week, the people said. David Polk, a spokesman for Lexington, Massachusetts-based Raytheon, and SEC spokesman John Heine declined comment.
Bloomberg News
