We can finally tell you the rest of the story regarding L3 Communications’ EOTech Sights. The Department of Justice has been investigating EOTech for some time and has finally filed suit (US v. L-3 Communications EOTech Inc., 15-cv-09262) in US District Court, Southern District of New York (Manhattan).

Specifically, the Government’s allegations concentrate on the performance of the Holographic Weapon Sights at temperature extremes as well as in high moisture environments. The Government also claims that EOTEch failed to disclose testing that demonstrated the inaccuracy issues in those environments.

In addition to naming L-3 and EOTech as defendants in the Government’s suit, they also named EOTech’s president, Paul Mangano which isn’t very common. They are seeking unspecified triple damages plus civil penalties of as much as $11,000 for each fraudulent claim.

L-3 has been aware of the pending action, having mentioned the issue in their July 2015 SEC filing as well as setting aside $26 million.

Update – By mid-afternoon, L-3 had settled with the government for $25.6 million which clearly indicates L-3 has known since summer how much the US Government would be willing to accept in relief. Their quick action helped turn a drop in stock value of more than 6% at mid-day, yet they still closed the day down from opening prices.

What remains, is for L-3 to answer to domestic consumers, state and local governments as well as international customers.

Below is the filing. In suggest you read it. The Government’s case is compelling.

Click to view .pdf

Tags: EOTech, L3 Communications