Boeing to pay $200 million to settle costs, mislead investors about 737 MAX

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THE BHARAT EXPRESS NEWS INSURANCE NEWS
THE BHARAT EXPRESS NEWS INSURANCE NEWS

boeing co. pays $200 million to settle civil charges by means of the U.S. Securities and Exchange Commission that it misled investors about its 737 MAX, which was grounded for 20 months after two deadly crashes killed 346 people, the agency said on Thursday.

Boeing knew after the initial crash that a flight control system posed a safety concern, but assured the public that the 737 MAX plane was “as safe as any plane ever flown through the air,” the SEC said in announcing the announcement. settlement.

The SEC also said former Boeing CEO Dennis Muilenburg had agreed to pay $1 million to settle costs.

Neither Boeing nor Muilenburg have admitted or denied the SEC’s findings, the agency said. A fund will be set up for the benefit of disadvantaged investors, it said.

Boeing shares rose 0.4 percent in after-hours trading.

“In times of crisis and tragedy, it is especially important that public companies and executives provide complete, fair and truthful information to the markets,” SEC Chair Gary Gensler said in a statement. Boeing and Muilenburg ‘failed in this most basic obligation’ he said.

The SEC has sued Boeing and Muilenburg for making materially misleading public statements following Boeing aircraft crashes in 2018 and 2019.

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boeing, which noted that it did not admit or deny the wrongdoing in the settlement agreement, said it had made “fundamental changes that have strengthened our safety processes” and said the “settlement is part of the company’s broader efforts to responsibly resolve outstanding legal issues related to the 737 MAX accidents.”

The crashes were linked to a flight control system called the Maneuvering Characteristics Augmentation System (MCAS). The SEC said: “Boeing and Muilenburg knew after the initial crash that MCAS posed an ongoing safety concern, but nevertheless assured the public that the 737 MAX aircraft was ‘as safe as any aircraft that has ever flown through the air.'”

tThe first crash of a Lion Air flight in Indonesia occurred in October 2018.

After the second crash in Ethiopia in March 2019the SEC said: “Boeing and Muilenburg assured the public that there were no errors or gaps in the certification process related to MCAS, despite being aware of conflicting information.”

Boeing has settled most of the claims of the two fatal crashes. Last year, it acknowledged liability for compensatory damages in lawsuits brought by families of the 157 people killed in the Ethiopian Airlines 737 MAX crash in 2019. A small number of trials are expected to begin in 2023 to resolve claims.

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The Federal Aviation Administration required that 737 MAX pilots undergo new training to deal with MCAS, as well as impose significant new security measures and other software changes to the flight control system before the aircraft could be returned to service.

The crashes cost Boeing more than $20 billion and led Congress to pass sweeping legislation to reform how the FAA certifies new aircraft. Boeing faces a December TBEN to get FAA approval of its 737 MAX 7 and 10 variants, or to meet new modern cockpit warning requirements.

In January 2021, Boeing agreed to pay $2.5 billion in fines and compensation to resolve a US Justice Department criminal investigation into the 737 MAX crashes.

Boeing pays $2.5 billion to settle with Justice Department over 737 MAX crashes

The Justice Department’s settlement, which allowed Boeing to avoid prosecution, included a $243.6 million fine, $1.77 billion in damages to airlines and a $500 million crash victim fund for conspiracy to commit fraud. due to the flawed design of the aircraft.

tThe families of some of the people killed in the Boeing crashes have asked a judge to declare that the government violated their legal rights when it reached the settlement.

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In December 2019, Boeing fired Muilenburg after the company clashed with regulators over the timing of the 737 MAX’s return. A Muilenburg lawyer, who does not admit or deny the abuses, did not immediately respond to a request for comment.

Muilenburg left Boeing with $62 million in compensation and retirement benefits but received no severance pay.

“Boeing and Muilenburg are profiting people by misleading investors about the safety of the 737 MAX, all in an effort to restore Boeing’s image after two tragic accidents that resulted in the loss of 346 lives and immeasurable grief for so many families. the statement said. SEC Director of Enforcement Gurbir Grewal.

Last November, Boeing’s current and former corporate directors reached a $237.5 million settlement with shareholders to settle a lawsuit over the board’s safety oversight of the 737 MAX.

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