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Case Status:    SETTLED
On or around 12/10/2004 (Date of order of final judgment)

Filing Date: October 14, 1999

Raytheon settles class action lawsuit for $410 million. The settlement includes a cash payment of $210 million and warrants for Raytheon stock valued at $200 million. PricewaterhouseCoopers agreed to pay $50 million to settle claims from a class-action securities fraud lawsuit brought by New York State relating to the firm's role as outside auditor of Raytheon Co

The lawsuit charges Raytheon and certain of its officers and directors with violations of the securities laws and regulations of the United States. The consolidated complaint alleges that defendants issued a series of false and misleading statements concerning the Company's integration of certain major acquisitions. The complaint alleges that as a result of these materially false and misleading statements the price of Raytheon stock was artificially inflated during the Class Period.

Various cases were filed in Massachusetts and Maryland against Raytheon Company, its auditor and its officers and directors. Motions were made to consolidate the various cases and appoint lead plaintiff. On March 20, 2000, lead plaintiff and counsel were appointed and the cases were consolidated under the caption In re Raytheon Company Securities Litigation, Lead Docket No. 99-12142 (PBS) (D. Mass.). An amended consolidated complaint was filed on June 12, 2000. The class period was extended to October 17, 1998 to October 12, 1999. Defendants filed motions to dismiss on September 8, 2000. Plaintiffs filed a memorandum in opposition to the motions to dismiss and requesting oral argument on December 12, 2000. Defendants filed replies in support of their motions to dismiss on February 2, 2001. A hearing on the motions to dismiss was held on February 9, 2001. On August 29, 2001, the Court dismissed without prejudice the complaints against defendants PricewaterhouseCooper (PWC) and Franklyn A. Caine. A motion for class certification was filed on November 15, 2001. Judge Saris granted the motion to certify the litigation as a class action on March 22, 2002. Plaintiffs filed a second amended complaint on March 17, 2003. PWC filed a motion to dismiss the new complaint on April 24, 2003. The Company answered the new complaint on April 28, 2003. Plaintiffs filed their opposition to the PWC motion to dismiss on May 1, 2003. On May 21, 2003, the Court denied PWC's motion to dismiss. PWC answered the second amended complaint on June 30, 2003. On April 26, 2004, in response to a motion for summary judgment based on the pleadings, the Court entered an order dismissing plaintiffs' first claim against PWC and limiting the class period to March 30, 1999 through October 12, 1999.

After discovery disputes, several motions for summary judgment and extensive pre-trial preparation and briefing, on May 13, 2004, less than two weeks before the case was to proceed to jury trial, the Company announced that it had reached an agreement in principle to settle the litigation. The terms of the settlement, which were approved by the court, include a cash payment of $210 million and warrants for Raytheon stock with a stipulated value of $200 million. Plaintiffs' attorney's fees are included within the settlement. The warrants have a five-year term with a strike price of $37.50. Although Raytheon apparently has yet to reach an agreement with its insurance carriers, the Company stated that it 'expects to receive insurance proceeds of $75 million in connection with the settlement.'

On Tuesday, May 25, 2004, PricewaterhouseCoopers announced that it would pay $50 million to the Class (in addition to the $410M from the Company) in the class action lawsuit filed by Raytheon Co. shareholders who claimed the auditing firm signed off on misleading financial statements by the Waltham-based defense contractor. This settlement is also subject to judicial approval by the Massachusetts District Court.

The original complaint charges that Raytheon and two of its highest officers violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The Complaint alleges that defendants issued materially misleading statements in Securities Exchange Commission filings and press releases purporting to describe an ongoing cost reduction program, while concealing from investors the facts that it was experiencing serious cost overruns and would be required to take hundreds of millions of dollars of charges against current income. The Complaint further alleges that when the extent of Raytheon's problems was finally revealed at the close of the Class Period, Raytheon common stock lost 40% of its value in one day.

COMPANY INFORMATION:

Sector: Conglomerates
Industry: Conglomerates
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: RTN
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: D. Massachusetts
DOCKET #: 99-CV-12142
JUDGE: Hon. Patti B. Saris
DATE FILED: 10/14/1999
CLASS PERIOD START: 01/28/1999
CLASS PERIOD END: 10/12/1999
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Berger & Montague PC
    1622 Locust Street, Berger & Montague PC, PA 19103
    800.424.6690 215.875.4604 · investorprotect@bm.net
  2. Lawrence G. Soicher
    342 Madison Avenue, 18th Floor , Lawrence G. Soicher, NY 10173
    212/883.8000 ·
  3. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
    600 West Broadway, 1800 One America Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA), CA 92101
    800.449.4900 · support@milberg.com
  4. Moulton & Gans LLP
    133 Federal Street, Moulton & Gans LLP, MA 2110
    617.369.7979 ·
No Document Title Filing Date
COURT: D. Massachusetts
DOCKET #: 99-CV-12142
JUDGE: Hon. Patti B. Saris
DATE FILED: 03/18/2003
CLASS PERIOD START: 10/07/1998
CLASS PERIOD END: 10/12/1999
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Berman DeValerio Pease & Tabacco PC
    One Liberty Square, Berman DeValerio Pease & Tabacco PC, MA 02109
    617.542.8300 ·
  2. Milberg Weiss Bershad & Schulman LLP (New York)
    One Pennsylvania Plaza, 49th Floor, Milberg Weiss Bershad & Schulman LLP (New York), NY 10119
    212.594.5300 212.868.1229 · info@milbergweiss.com
  3. Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY)
    One Pennsylvania Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY), NY 10119-1065
    212.594.5300 ·
  4. Moulton & Gans LLP
    133 Federal Street, Moulton & Gans LLP, MA 2110
    617.369.7979 ·
No Document Title Filing Date
No Document Title Filing Date