Caterpillar, Inc. (NYSE: CAT) confirmed that the Internal Revenue Service, the Federal Deposit Insurance Corp. and the Commerce Department are conducting law enforcement activity in three Illinois sites, including Peoria, where the caterpillar’s corporate headquarter is located, East Peoria and Morton.
“Law enforcement is present in various Peoria-area Caterpillar facilities executing a search warrant. Caterpillar is cooperating,” Corrie Scott, the spokeswoman of Caterpillar, said in the statement. It was still not clear why federal investors is searching the three sites, and Scott declined to comment further.
Because of the raid of the three locations, shares of the company dropped sharply in the afternoon trading hours on Thursday, which heading for the biggest drop since June.
Last month, Caterpillar said that it received a grand jury subpoena from the U.S. District Court for the Central District of Illinois in 2015, which might be related to the search. “We believe that the relevant transactions complied with applicable tax laws and did not violate judicial doctrines,” the company said.
“However, we currently believe that this matter will not have a material adverse effect on the Company’s consolidated results of operations, financial position or liquidity,” Caterpillar said. The company said that it can not predict the potential losses and the outcome of investigations.