AAR Corp. Resolves Foreign Corrupt Practices Act Investigations with DOJ and SEC

On December 19, 2024, AAR Corp. (NYSE: AIR) announced the resolution of investigations related to potential violations of the U.S. Foreign Corrupt Practices Act (FCPA) involving transactions in Nepal and South Africa. The Company reached resolutions with the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) after cooperating in a multi-year investigation.

In 2019, AAR self-reported the potential violations and engaged in investigations involving transactions from 2016 and 2017. Following this, the Company signed a Non-Prosecution Agreement (NPA) with the DOJ and agreed to an Offer of Settlement with the SEC, which resulted in a cease-and-desist order. The investigations revealed that the conduct in question was primarily carried out by a former employee of a Company subsidiary and third-party agents.

Under the terms of the NPA and SEC Order, AAR will pay a total of $55,599,653, encompassing penalties, forfeiture, and prejudgment interest. This payment will be reflected as a one-time charge in the Company’s consolidated financial statements for the second quarter of fiscal year 2025, ending November 30, 2024. AAR intends to fund these payments through a combination of cash reserves and borrowings under its revolving credit facility.

AAR’s Chairman, President, and CEO, John M. Holmes, expressed satisfaction with the resolution, acknowledging the DOJ and SEC for recognizing the Company’s extensive cooperation. He emphasized AAR’s commitment to transparency, accountability, and ethical operations while delivering innovative solutions to its global customer base.

Since the initial reporting of potential violations in 2019, AAR has taken significant steps to strengthen its global compliance program. The remedial actions and cooperation undertaken by the Company during the investigations were acknowledged by both regulatory bodies.

AAR Corp. is a global aerospace and defense aftermarket solutions provider with operations across more than 20 countries, supporting commercial and government customers through various segments. Further information about the Company can be found at aarcorp.com.

This release may contain forward-looking statements, reflecting management’s expectations about future conditions, such as meeting financial obligations arising from the resolution of the investigations conducted by the DOJ and SEC. These statements are subject to risks and uncertainties, as outlined in the company’s filings with the U.S. Securities and Exchange Commission.

The official press release issued by AAR Corp. regarding the resolution of the investigations can be accessed through Exhibit 99.1 of the related SEC filing dated December 19, 2024.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read AAR’s 8K filing here.

AAR Company Profile

AAR Corp. provides products and services to commercial aviation, government, and defense markets worldwide. The Parts Supply segment leases and sells aircraft components and replacement parts. The Repair & Engineering segment provides airframe maintenance services, such as airframe inspection, painting, line maintenance, airframe modification, structural repair, avionics service and installation, exterior and interior refurbishment, and engineering and support services; component repair services comprising maintenance, repair, and overhaul (MRO) services, engine and airframe accessories, and interior refurbishment; and landing gear overhaul services, including repair services on wheels and brakes.