TransDigm Group, Inc.

Case Details

Class Period:
May 10, 2016 – January 19, 2017
Date Filed:
August 10, 2017
Case Number:
Northern District of Ohio

Case Summary

TransDigm designs, produces, and supplies aircraft components to customers around the globe.  Notably, the Company’s largest customer is the U.S. Government. 

According to the Complaint, throughout the Class Period, Defendants made false and/or misleading statements, and/or failed to disclose material adverse facts about the Company’s business, operations, and prospects.  Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) TransDigm’s growth and profitability were artificially inflated as a result of its illicit business practices; (2) the Company used exclusive distributors to make noncompetitive government bids seems competitive; (3) TransDigm subsidiaries failed to list TransDigm as a parent entity when submitting government bids; and (4) as a result of the foregoing, Defendants’ statements about TransDigm’s business, operations, and prospects were false and misleading and/or lacked a reasonable basis. As a result of this fraudulent scheme, Defendants were able to artificially inflate the Company’s financials throughout the Class Period.

On December 5, 2017 Saxena White P.A. was appointed lead counsel and the City of Hollywood Firefighters Pension Fund was appointed lead plantiff.

On February 16, 2018, Plaintiff filed their Amended Complaint. On May 7, 2018, Defendants moved to dismiss the Amended Complaint. Plaintiff filed their opposition to Defendants’ motion to dismiss on June 22, 2018. On December 21, 2018, Lead Plaintiff filed its Second Amended Complaint.  However, on February 25, 2019, the U.S. Department of Defense (“DoD”) Office of the Inspector General released the results of its audit of TransDigm parts contracts (the “IG Report”).  The IG Report confirmed and bolstered many of the allegations in the Second Amended Complaint.  For example, the IG Report revealed that, in a sampling of 113 TransDigm’s parts contracts reviewed, nearly all of them—112—massively overcharged the DoD, with excess profits as high as 4,400%.

In light of these revelations, the Court granted Lead Plaintiff leave to further amend its complaint in order to add facts from the IG Report.  Lead Plaintiff will file a Third Amended Complaint on March 29, 2019.

Action Details

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