The SEC issued a subpoena for documents and alerted the company about the probe on April 7, according to a filing today. United Technologies said it voluntarily shared details on an internal inquiry into the case with the U.S. Justice Department, SEC and the U.K.’s Serious Fraud Office in December and January.
“UTC is cooperating fully with the investigation,” the Hartford, Connecticut-based company said in the filing. “Because the investigation is at an early stage, we cannot predict its outcome or the consequences thereof at this time.”
The sales representative, who wasn’t an employee, was involved with engine sales for the company’s Pratt & Whitney unit and the International Aero Engines alliance, along with aftermarket services, United Technologies said. The engine units suspended payments to the salesperson, triggering a lawsuit and an arbitration claim, United Technologies said.
“We are contesting the lawsuit and the arbitration claim,” United Technologies said. John Moran, a company spokesman, declined to elaborate beyond the filing. Christina D’Amico, a spokeswoman for the SEC, declined to comment.
United Technologies fell 1.5 percent to $117.21 at the close in New York. The stock is up 3 percent this year, topping the 0.8 percent gain for the Standard & Poor’s 500 Index.
In 2012, United Technologies agreed to $55 million in penalties after Pratt & Whitney Canada pleaded guilty to violating U.S. State Department arms-trafficking regulations. The case, arising from exports to China of helicopter engines with modified control software from 2002 to 2005, included an accord with the Justice Department, with the company agreeing to $20.7 million in penalties.
Pratt competes with engine makers including General Electric Co. and Rolls-Royce Holdings Plc (RR/), and holds a 49.5 percent ownership interest in IAE, according to today’s United Technologies filing. United Technologies also makes aviation components such as landing gear and aircraft electronics.
IAE’s V2500 engine is used on narrow-body jets such as Airbus Group NV’s A320. Pratt acquired Rolls-Royce’s IAE equity and program share in 2012. The shareholder companies in IAE are now Pratt, Pratt & Whitney Aero Engines International, Japanese Aero Engines Corp. and MTU Aero Engines, according to IAE’s website.
To contact the reporter on this story: Ed Dufner in Dallas at email@example.com