Boeing agrees to pay $200 million for misleading public about 737 Max Get Whole Detail

Boeing agrees to pay $200 million for misleading public about 737 Max
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CHICAGO — Boeing and its former CEO Dennis Muilenburg have agreed to pay huge fines to settle charges by the Securities and Exchange Commission that they misled the public about the safety of the 737 Max after two deadly crashes in 2018 and 2019.

The SEC alleges that after the October 2018 crash of a Lion Air 737 Max that killed 189 people, Boeing and Muilenburg knew that part of the plane’s flight control system posed an ongoing safety problem, but told the public that The 737 Max certainly flies. Following the fatal crash of the 737 Max on March 10, 2019, the SEC alleges that Boeing and Muilenburg knowingly misled the public about “slips” and “loopholes” in the certification process for that flight control system.

“In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair and truthful disclosures to the markets,” SEC Chairman Gary Gensler said in a statement. “The Boeing Company and its former CEO, Dennis Muilenburg, have failed in this fundamental commitment. They misled investors by assuring them about the safety of the 737 MAX when they knew there were serious safety issues.”

In a statement, Boeing said the settlement “fully resolves the SEC’s previously disclosed investigation into matters related to the 737 MAX accidents.”

“Today’s settlement is part of the company’s broader effort to resolve outstanding legal issues related to the 737 MAX accidents responsibly and in a manner that serves the best interests of our shareholders, employees and other stakeholders.” , Boeing said.

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The company and Muilenburg agreed to settle allegations of violating anti-fraud provisions of US securities laws, but neither admitted nor denied the SEC’s allegations. Boeing agreed to pay a $200 million severance package, and Muilenburg agreed to pay $1 million.

“Boeing and Muilenburg put profits before people by misleading investors about the safety of the 737 Max in order to rehabilitate Boeing’s image after two tragic accidents that resulted in the loss of 346 lives and incalculable suffering for so many families,” Gurbir. Grewal, director of the SEC’s Division of Enforcement, said in a statement.

The fines, while large, pale in comparison to the financial hit Boeing has taken over the years over the 737 Max. Boeing’s reported losses have reached tens of billions of dollars, and that doesn’t take into account the company’s ongoing legal risks.

Boeing shares fell more than 3 percent on Thursday but rose slightly in after-hours trading after the SEC announcement.

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