Aerojet Rocketdyne to pay $9 mln to resolve U.S. cybersecurity allegations (updated)

Aerojet Rocketdyne Holdings

09/07/2022 02:07

(Updates with Justice Department comment, background)
    By David Shepardson and Kanishka Singh
    WASHINGTON, July 8 (Reuters) - Rocket engine maker Aerojet
Rocketdyne  AJRD.N  has agreed to pay $9 million to resolve
allegations it misrepresented its compliance with cybersecurity
requirements in federal government contracts, the U.S. Justice
Department said on Friday https://www.justice.gov/opa/pr/aerojet-rocketdyne-agrees-pay-9-million-resolve-false-claims-act-allegations-cybersecurity.
    Aerojet did not respond to requests for comment.
    Aerojet provides propulsion and power systems for launch
vehicles, missiles and satellites and other space vehicles to
the Pentagon, NASA and other federal agencies, the Justice
Department said.
    The settlement resolves a 2015 lawsuit filed by former
Aerojet employee Brian Markus under the whistleblower provisions
of the False Claims Act. 
    Markus and Aerojet reached a settlement of the case on the
second day of trial in April, the Justice Department said. He
will receive $2.61 million as his share of the settlement. The
settlement was approved on July 5 by a U.S. District Court in
California.
    A court filing from Markus said between July 2013 and
September 2015, Aerojet received over $2.6 billion in government
funds by "fraudulently procuring" Defense Department and
National Aeronautics and Space Administration (NASA) contracts
that were "essential components of America’s national defense
and aerospace programs" by falsely representing it complied with
cybersecurity regulations.
    After a 2013 cyberattack, Aerojet hired Markus as a senior
cyber security official but Markus said he did not have the
budget or staff Aerojet had promised. He also claimed Aerojet in
2015 concealed from its board that the company was not compliant
with cyber security requirements.
    Aerojet said in its defense in an April court filing it
"made many detailed disclosures to the relevant government
agencies regarding the state of its compliance with these
cybersecurity standards in 2014, 2015, and beyond."
    Aerojet Rocketdyne did not admit any wrongdoing as part of
the settlement.
    "Whistleblowers with inside information and technical
expertise can provide crucial assistance in identifying knowing
cybersecurity failures and misconduct,” said Principal Deputy
Assistant Attorney General Brian Boynton.

 (Reporting by David Shepardson and Kanishka Singh in
Washington; Editing by Christian Schmollinger)
 ((Kanishka.Singh@thomsonreuters.com; +12024508248;))