KSF investigates Lockheed Martin over contract losses and disclosures
Kahn Swick & Foti LLC is investigating Lockheed Martin Corporation for potential breaches of fiduciary duties following disclosures of underestimated contract costs, executive compensation amendments, and $5 billion in stock repurchases. The company faces an ongoing securities class action lawsuit related to the disclosures.
*this image is generated using AI for illustrative purposes only.
Kahn Swick & Foti LLC (KSF) has commenced an investigation into Lockheed Martin Corporation to determine if its officers and directors breached fiduciary duties to shareholders or violated state and federal laws. The investigation focuses on the company's disclosures regarding cost overruns on classified defense contracts and subsequent corporate actions. KSF's inquiry follows a series of revelations beginning in early 2024, during which the company publicly represented that it maintained disciplined bidding practices and adequate oversight of its contracts.
Disclosures and Financial Impact
Between October 2024 and July 2025, Lockheed Martin disclosed three successive waves of losses attributed to significantly underestimated costs on several contracts. Each disclosure revealed losses larger than the previous one, contradicting management's assertions that the situation had been fully assessed and contained.
| Event | Date | Description |
|---|---|---|
| First Disclosure | October 2024 | Initial revelation of underestimated costs |
| Second Disclosure | January 2025 | Increased losses reported |
| Third Disclosure | July 2025 | Further escalation of losses |
Corporate Actions and Litigation
During the period of increasing losses, Lockheed Martin's board amended executive compensation formulas to shield bonuses from the impact of the anticipated losses. The company also repurchased nearly $5 billion of its own stock at prices allegedly inflated by misleading statements. These actions preceded a securities class action lawsuit against the company and certain executives, charging them with failing to disclose material information during the Class Period in violation of federal securities laws. The lawsuit remains ongoing.
Investigation Scope
KSF is examining whether Lockheed Martin's officers and directors breached their fiduciary duties. The law firm is seeking information from long-term shareholders to assist in its investigation. KSF, a boutique securities litigation firm ranked among the top 10 nationally by ISS Securities Class Action Services based on total settlement value, represents public and private institutional investors as well as retail investors in seeking recoveries for investment losses.
How might the ongoing investigation impact Lockheed Martin's ability to secure future classified defense contracts?
What are the potential financial penalties or settlements the company could face if the fiduciary duty breaches are proven?
Will the amendment of executive compensation formulas face additional scrutiny from regulators or shareholders?
17
Create Custom Screeners 
Access 200+ Pre-built Filters 
Use 50+ Readymade Screener 
