The Boeing Company will pay $200 million to settle charges that the company and its former CEO Dennis Muilenburg misled investors about the safety of its 737 Max after two of the airliners crashed, killing 346 people.
The Securities and Exchange Commission (SEC) said last Thursday that it charged the aircraft manufacturer and the former the CEO – who was ousted in 2019, nine months after the second crash – with making significant misleading public statements about the plane and an automated flight-control system that was implicated in the crashes in Indonesia and Ethiopia.
The SEC said Boeing misled investors by suggesting human error was the cause of the two fatal crashes and omitting the company’s concerns about the plane. The SEC noted they also falsely claimed that there had been no gaps in the process of certifying the plane in the first place. In settlement agreement, SEC says Boeing and Mr. Muilenburg misled investors after – Lion Air ‘s – plane crashed in Indonesia in 2018 by suggesting human error was to blame and omitting the company’s own concerns about the aircraft ‘s flight control system ( MCAS ). Boeing made further misleading claims about aircraft safety after a second plane – Ethiopian Airlines – crashed in Ethiopia a few months later. “In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair and truthful information to the markets,” SEC Chairman Gary Gensler said in a statement. “The Boeing Company and its former CEO, Dennis Muilenburg, failed in this most basic obligation.”
Neither Boeing nor Muilenburg admitted any wrongdoing, but have offered to settle and pay penalties, including $1 million to be paid by Muilenburg.
The US aircraft manufacturer last year reached a $2.5 billion settlement with federal prosecutors in a deferred prosecution agreement. This agreement ended the criminal charge that Boeing had conspired to defraud the Federal Aviation Administration (FAA). The fine included a $ 500 million fund to compensate the families of the 346 victims of the Lion Air and Ethiopian Airlines crashes.