Boeing and its former CEO Dennis Muilenburg have agreed to pay a hefty fine to settle allegations from the Securities and Exchange Commission that they misled the public about the safety of the 737 Max after two years. service Deadly accident in 2018 and 2019.
SEC allegations that, following the October 2018 Lion Air 737 Max jet crash that killed 189 people, Boeing and Muilenburg knew that part of the plane’s flight control system caused an ongoing safety concern but told the public that the 737 Max was safe to fly. Following the deadly crash of a 737 Max on March 10, 2019, the SEC alleges that Boeing and Muilenburg intentionally misled the public about “negligibility” and “loopholes” in the system’s certification process. control that flight.
“In times of crisis and tragedy, it is especially important that public companies and executives provide complete, fair, and truthful information to the market,” said SEC Chairman Gary Gensler. know in a statement. “The Boeing Company and its former CEO, Dennis Muilenburg, have failed in this most basic obligation. They misled investors by offering assurances about the safety of the 737 MAX, despite knowing about serious safety concerns.”
In a statement, Boeing said that the agreement “completely resolves the previously disclosed SEC investigation into issues related to the 737 MAX crash.”
“Today’s agreement is part of a broader effort by the company to responsibly resolve outstanding legal issues related to the 737 MAX crash in a manner that serves the interests of the public,” Boeing said in a statement. best interests of shareholders, employees and other stakeholders”.
The company and Muilenburg have agreed to settle allegations of violations of the anti-fraud provisions of US securities laws, but they have not acknowledged or denied the SEC’s allegations. Boeing agreed to pay a $200 million payment, and Muilenburg agreed to pay $1 million.
“Boeing and Muilenburg put profits before everyone else by misleading investors about the safety of the 737 Max in an effort to restore Boeing’s image after two tragic crashes that killed 346 people and caused immense pain. measure for so many families,” said Gurbir Grewal, director of the SEC’s Division of Enforcement in a statement.
The fines, although large, pale in comparison to financial blow Boeing lost years on the 737 Max. Boeing’s announced losses have run into the tens of billions of dollars, and that doesn’t take into account the company’s legal exposure.
Shares of Boeing
(FATHER) fell more than 3% on Thursday but rose slightly in after-hours trading following the SEC announcement.