Boeing on Thursday agreed to pay $200 million to settle Securities and Exchange Commission charges for misleading investors after two deadly 737 MAX crashes killed 346 people and grounded its fleet for 20 months — Boeing’s most recent settlement following the 737 disaster.
The SEC accused Boeing and its former CEO Dennis Muilenburg of making “materially misleading public statements” after two crashes of its 737 MAX in 2018 and 2019.
The SEC alleges that Boeing and Muilenburg knew the first crash was caused in part by a faulty flight control function that presented an “ongoing aircraft safety issue,” but still told the public the plane was “as safe as any aircraft ever.” flew in the skies,” which instead blamed the crash on pilot error and poor aircraft maintenance.
After the 2019 crash, the SEC said Boeing defended the processes used to certify the 737 MAX, even though Muilenburg “was aware of information that challenged certain aspects of the certification process.”
In addition to the $200 million the company must pay, Muilenburg, who was CEO at the time of the crashes before being fired in December 2019, agreed to pay $1 million.
Boeing has not admitted or denied any of the SEC’s allegations, the regulator said.
It’s the latest financial settlement following the 737 MAX crash, after Boeing agreed in 2021 to pay $2.5 billion to clear federal criminal charges for misleading the Federal Aviation Administration , and a $237.5 million settlement in April by the company’s board of directors.
In a statement to forbesA company spokesman said the settlement is part of Boeing’s “broader effort to responsibly resolve outstanding matters related to the 737 MAX accidents” to best serve its “shareholders, employees and other stakeholders.”
All 737 MAX jets – Boeing’s latest version of its best-selling plane – have been grounded around the world after a fatal March 2019 crash in Ethiopia, which came about five months after another crash in Indonesia. Both crashes were caused by a faulty sensor in the flight control system that pushed the aircraft’s nose down. The Federal Aviation Administration allowed the planes to fly again nearly 20 months later, after a round of test flights following changes to its software to prevent the downward thrust. A spokesman said forbes Boeing has made “broad and profound changes” in response to the crashes, including by introducing an increased safety process and more oversight. Last year’s $237.5 million shareholder settlement also resulted in the company hiring an outside ombudsman and adding a member to its board of directors with experience in aviation, engineering and product safety oversight. However, Boeing lost nearly $12 billion in 2020 after it halted deliveries of its 737 MAX jets and the Covid-19 pandemic halted travel.
“In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair and truthful disclosures to the markets — the Boeing Company and its former CEO, Dennis Muilenburg, failed to fulfill this most basic obligation,” said SEC Chairman Gary Gensler said in a press release.
Boeing Directors Settle Shareholder Lawsuit Over 737 MAX Crash for $237.5M (Forbes)
Boeing Pays $200M to Settle SEC Investigations Related to 737 MAX Crashes (Wall Street Journal)
Boeing to Pay $200M to Settle Investor Misleading Charges After 737 Max Crash (CNBC)