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Aerojet Rocketdyne to pay $9M million to resolve cybersecurity allegations

Aerojet Rocketdyne

(Reuters) — Rocket engine maker Aerojet Rocketdyne has agreed to pay $9 million to resolve allegations it misrepresented its compliance with cybersecurity requirements in federal contracts, the U.S. Justice Department said Friday.

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, National Aeronautics and Space Administration 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.

Mr. 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 Mr. Markus said between July 2013 and September 2015, Aerojet received over $2.6 billion in government funds by “fraudulently procuring” Defense Department and 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 Mr. Markus as a senior cybersecurity official, but he 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 cybersecurity 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 did not admit any wrongdoing as part of the settlement.