Honeywell Aerospace Agrees To Pay Over $2M To Settle Cybersecurity Allegations — HONA Stock Falls 2.5%

• The alleged violations involved cybersecurity requirements for one of Honeywell’s networks and occurred from April 2020 through December 2023.
• The case stemmed from a whistleblower lawsuit filed under the False Claims Act by former Honeywell employee Rachel Tenney.
• Tenney will receive $375,823 as her share of the settlement, according to the Justice Department.

Honeywell Aerospace (HONA) has agreed to pay $2.04 million to resolve allegations under the False Claims Act that it failed to comply with cybersecurity requirements tied to a U.S. Department of Defense contract, the Justice Department said on Tuesday.

At the time of writing on Tuesday afternoon, HONA stock was trading 2.54% lower.

Honeywell Agrees To $2.04M Settlement

The settlement resolves allegations that, from April 2020 through December 2023, a business unit of Honeywell International submitted false claims for payment by failing to comply with cybersecurity requirements specified in National Institute of Standards and Technology Special Publication 800-171 for one of Honeywell’s networks, as required by the contract and regulation, said the U.S. Department of Justice (DOJ) in a statement.

The allegations arose from a whistleblower lawsuit filed under the False Claims Act, which allows private citizens to sue on behalf of the government and share in any recovery. Under the settlement, the whistleblower, Rachel Tenney, a former Honeywell employee, will receive $375,823 as her share of the recovery.

DOJ On Cybersecurity Compliance

“Government contractors that obtain defense information in administering their contracts must follow required cybersecurity standards,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “The Justice Department will continue to investigate potential violations of these cybersecurity requirements to protect this critical information.”

U.S. Attorney Russ Ferguson for the Western District of North Carolina said cybersecurity requirements for federal contractors are designed “to protect government systems and prevent unauthorized access to government data,” adding that companies that “seek and profit off of government contracts” have an obligation to safeguard sensitive information.

Honeywell Aerospace, headquartered in Phoenix, Arizona, provides aerospace products and solutions to government and commercial customers. Before becoming a standalone public company on June 29, Honeywell Aerospace operated as a business segment of Charlotte, North Carolina-based Honeywell International Inc, according to the DOJ statement.

HONA Stock: Stocktwits Retail Sentiment

On Stocktwits, retail sentiment for HONA was ‘bearish,’ while message volume was ‘low’ at the time of writing.

Shares of HONA have lost 23% year-to-date.

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