L-3 Stock Takes a Tumble

A settlement was reach by defense contractor L-3 today. Courtesy photo
A settlement was reach by defense contractor L-3 today. Courtesy photo

A video crew from CBS 11 was at the Greenville L-3 plant doing a news piece on the defense contractor’s proposed settlement to the United States Government today.

Reuters reports L-3 Communications Holdings Inc agreed to pay $25.6 million to settle a lawsuit accusing the military contractor of defrauding the U.S. government by selling thousands of holographic weapon sights that it knew were defective.

Tuesday’s settlement resolves civil claims that L-3 and its EOTech unit violated the federal False Claims Act by concealing defects that caused the sights to fail in extreme cold or humidity, including one defect that was hidden for 8-1/2 years.

Also known as combat optical sights, the sights are mounted on weapons and used by special operations forces and law enforcement to target and accurately return fire in extreme environmental conditions, according to papers filed by U.S. Attorney Preet Bharara in Manhattan federal court.

In a statement, L-3 said it cooperated fully with the government and is pleased to settle. The company previously set aside money for the accord, which requires court approval. Shares of L-3 fell as much as 6.1 percent to $118.30 after the lawsuit was filed, but before the settlement became public.

In afternoon trading, the shares were down $2.37, or 1.9 percent, at $123.65 on the New York Stock Exchange.

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