FTAI Aviation Ltd. Faces Scrutiny Amid Muddy Waters Report

SAN FRANCISCO, March 07, 2025 (GLOBE NEWSWIRE) -- Shares of FTAI Aviation Ltd. (NASDAQ: FTAI) took a hit on March 3, 2025, after Muddy Waters Research released a report suggesting that the company may be in violation of U.S. sanctions against Iran. The fallout from this report has also led to a securities class action lawsuit, known as Shannahan v. FTAI Aviation Ltd. et al., No. 1:25-cv-00541 (S.D.N.Y.), which aims to represent investors who purchased FTAI securities between July 23, 2024, and January 15, 2025.

Hagens Berman, a law firm, is actively investigating these allegations and encourages FTAI Aviation investors who have incurred significant losses to report their losses.

The Second Muddy Waters Report

On March 3, 2025, Muddy Waters issued a follow-up report titled "FTAI Could Be Violating U.S. Sanctions Against Iran." In this report, the firm reviewed images from Sorena Turbine, an aircraft Maintenance, Repair & Overhaul (MRO) company located in Tehran, which displayed an FTAI branded box. The report raised concerns about whether this incident was an isolated occurrence or part of a larger pattern of illicit activity.

The Initial Muddy Waters Report and the Snowcap Report

The first Muddy Waters report was published on January 15, 2025, which resulted in a 24% drop in FTAI's stock price and initiated an internal review by the company. This initial report included insights from a former FTAI executive and various industry insiders, alleging that FTAI was misclassifying one-time engine sales as MRO revenue in its Aerospace Products segment. Muddy Waters argued that this practice was misleading, creating an inflated growth narrative that benefitted insiders through stock sales. The report suggested that a significant portion of FTAI’s adjusted EBITDA in the aerospace segment came from these irregular sales and also accused the company of channel stuffing to enhance its financial results for 2023.

In a response, FTAI announced on January 21, 2025, that its Audit Committee had initiated a review in light of the allegations, leading to another decline of about 23% in the stock price. Following this, Snowcap Research added to these concerns on January 29, reporting that their own investigation confirmed many claims made by Muddy Waters. Snowcap characterized FTAI's Aerospace segment as a "fabrication" and noted confusion among former employees and industry competitors regarding the company’s accounting practices and disclosures.

Despite these serious allegations, FTAI’s Audit Committee later concluded that the claims made by the short-sellers were unfounded. Paul R. Goodwin, the Chair of the Audit Committee, stated, "After a thorough and comprehensive review…we have determined that the assertions…are unsupported and have no merit." Notably, however, FTAI’s statement did not delve into the specific allegations raised by Muddy Waters and Snowcap.

The FTAI Investor Class Action

The class-action lawsuit mirrors Muddy Waters’ allegations from the January 15 report, asserting that FTAI communicated false and misleading information to investors. The key points brought up in the suit include:

• Misrepresenting one-time engine sales as MRO revenue despite limited maintenance work on these assets;
• Presenting whole engine sales as individual module sales, leading to inflated revenue figures;
• Depreciating engines that are not on lease, which misleadingly reduces costs and inflates EBITDA.

Investors who believe they have experienced losses due to FTAI's practices are encouraged to come forward and share their experiences to assist in the ongoing investigation.

Individuals in possession of non-public information related to FTAI may also explore the SEC Whistleblower program, which can reward them for sharing valuable insights that could aid in the investigation.

About Hagens Berman

Hagens Berman is a prominent plaintiffs' rights law firm focused on holding corporations accountable for their actions. The firm has successfully represented various parties, including investors, whistleblowers, and consumers, achieving significant outcomes in cases of corporate misconduct. More information about their history and achievements can be found at their website.

FTAI, Sanctions, Investors