Boeing has agreed to pay the Securities and Exchange Commission $200 million to settle charges. The agency determined that Boeing made “materially misleading public statements” about the 737 Max crashes.
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Dennis Muilenburg, the company’s former CEO, will also pay $1 million to settle charges. The SEC claimed that Boeing and Muilenburg violated federal securities laws’ antifraud provisions. They neither admitted nor denied the findings of the agency.
According to the SEC, Boeing and Muilenburg were aware that the anti-stall Maneuvering Characteristics Augmentation System (MCAS) posed a continuing safety risk after the first crash in October 2018, which killed 189 people.
The company, on the other hand, stated that the 737 Max was “as safe as any airplane that has ever flown the skies.”
Following a second crash in March 2019 that killed 157 people, the company and Muilenburg claimed “there were no slips or gaps in the certification process with respect to MCAS, despite being aware of contrary information,” according to the SEC.
All 737 Max planes were grounded for more than 18 months after the crashes.
“There are no words to describe the tragic loss of life brought about by these two airplane crashes,” SEC Chair Gary Gensler said.
“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 in this most basic obligation.
“They misled investors by providing assurances about the safety of the 737 Max, despite knowing about serious safety concerns.”
The settlement “fully resolves the SEC’s previously disclosed inquiry into matters relating to the 737 Max accidents,” Boeing told .
“Today’s settlement is part of the company’s broader effort to responsibly resolve outstanding legal matters related to the 737 Max accidents in a manner that serves the best interests of our shareholders, employees, and other stakeholders.”
To avoid criminal charges, Boeing previously reached a $2.5 billion settlement with the Department of Justice. A grand jury indicted Mark A. Forkner, Boeing’s former chief technical pilot, on fraud charges last year.
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Forkner, the only Boeing employee charged with a crime in connection with the crashes, was accused of deceiving the FAA’s Aircraft Evaluation Group during the 737 Max’s evaluation and certification. A jury found Forkner not guilty after a four-day trial earlier this year.