In its statement on Thursday, AAR noted that it had self-reported potential violations in 2019 and cooperated fully with both the SEC and the DOJ during their investigations.
“The resolutions with both the DOJ and SEC make clear that the relevant conduct was principally carried out by a former employee of a company subsidiary and former third-party agents,” AAR said in its release.
The company also indicated that it expects to cover the costs associated with the nonprosecution agreement and the SEC settlement using cash resources and borrowings under its revolving credit facility.
John M. Holmes, the president and CEO of AAR, expressed the company’s satisfaction at resolving these matters with the DOJ and SEC. “AAR remains committed to transparency and accountability, and to operating in an ethical and compliant manner,” Holmes said.
The DOJ noted that while AAR self-reported the conduct that partially led to the resolution, it did not constitute a “voluntary self-disclosure” under DOJ policy. This is because media outlets in Nepal and South Africa had already reported on the potential misconduct, and an independent source had also brought the allegations to the DOJ’s attention prior to the company’s self-reporting. Nonetheless, AAR cooperated with the DOJ’s investigation, provided information promptly, and engaged in extensive remedial measures, all of which contributed to the company facing a significantly reduced penalty, the DOJ said.
