Aerojet Rocketdyne settles a major cybersecurity case for $9 million during the trial. DOJ initiative pursuing cybersecurity fraud violations advances

Aerojet Rocketdyne has settled the Government case against it involving allegations the company hid cybersecurity problems from the Government and will pay $9 million and counsel fees. The case was being tried before a federal jury in California in which the whistleblower Brian Markus, Aerojet’s former senior director of cybersecurity alleged the company concealed cybersecurity problems. Aerojet Rocketdyne develops missile defense and space launch systems. Markus alleged that there had been a previous data leak. This case was considered significant as the Department of Justice has announced its cyber-fraud initiative seeking to hold accountable anyone that knowingly misrepresents their cybersecurity practices or protocols or violates their obligations to report cybersecurity incidents or breaches. Government contracts are subject to Federal Acquisition Regulations and are supplemented by agency-specific regulations. For example, there are regulations requiring defense contractors to safeguard unclassified controlled technical info from cybersecurity threats. This means they have to implement specific controls covering areas of cybersecurity. Violations of these regulations may be subject to the False Claims Act, a whistleblower law allowing individuals with specific and unique information about the violations to bring an action against the violator and recover a percentage of recovered funds. The DOJ initiative followed an Executive ORder after the May 2021 ransomware attack that shut down an American oil pipeline system for six days. President Biden directed improvements to cybersecurity infrastructure including systems operated by government contractors.

JEFFREY NEWMAN, A FORMER PROSECUTOR IS A WHISTLEBLOWER WITH THE FIRM NEWMAN & SHAPIRO WHO REPRESENTS WHISTLEBLOWERS IN FALSE CLAIMS ACT AND SEC WHISTLEBLOWER CASES. HE CAN BE REACHED AT 617-823-3217 OR AT JNEWMAN@NEWMANSHAPIRO.COM