⚖ Oral Arguments, with Context

The Second Circuit hears investors' securities-fraud case against RTX, the parent of Pratt and Whitney. The investors say a powdered-metal manufacturing defect affected critical parts in Pratt's aircraft engines. They point to a 2020 failure in an older engine and a 2022 failure in a geared turbofan engine as warnings of a serious risk the company already knew about. In 2023, RTX announced accelerated engine inspections and lengthy groundings, with billions in expected costs. The investors sued RTX and several executives, alleging that earlier reassurances about technical problems and financial forecasts had concealed that risk. The district court dismissed the complaint before trial, finding that it did not adequately allege materially misleading statements or the required fraudulent state of mind. That state of mind is called scienter: deliberate deception, or recklessness so serious that it approximates actual intent. The securities litigation statute requires specific facts supporting a strong inference of that state of mind, not just a suspicion that something went wrong. That inference must be at least as compelling as a plausible innocent explanation. Materiality is a different question: would the information significantly change the picture for a reasonable investor? For an uncertain future event, the probability and potential size of the impact both matter. The investors will argue that RTX could not give reassuring answers while hiding a serious financial risk, even before a recall became inevitable. RTX will argue that it believed ordinary maintenance could address the problem until new technical findings in 2023, and that later bad news does not establish earlier fraud.

Peneycad v. RTX Corporation (No. 25-2549) — U.S. Court of Appeals for the Second Circuit, argued October 13, 2026.