Boeing Co BA.N will pay $200 million to settle US Securities and Exchange Commission civil lawsuits that it misled investors over its 737 MAX, which was grounded for 20 months after two fatal crashes killed 346 people, it said the agency Thursday.
The SEC also said former Boeing CEO Dennis Muilenburg had agreed to pay $1 million.
“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. He added that Boeing and Muilenburg “failed in this most basic obligation”.
The SEC said Boeing and Muilenburg have neither acknowledged nor denied the SEC’s findings. The regulatory body said a fund will be set up for the benefit of disadvantaged investors.
The SEC has sued Boeing and Muilenburg for making materially misleading public statements following Boeing aircraft crashes in 2018 and 2019.
Boeing confirmed the settlement, noting that it does not admit or deny wrongdoing. It 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 that “After the initial crash, Boeing and Muilenburg knew that MCAS posed an ongoing safety concern, but nevertheless assured the public that the 737 MAX aircraft was ‘as safe as any aircraft ever flown through the air.’”
After the second crash, the 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.”
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.
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.
In December 2019, Boeing fired Muilenburg after the company clashed with regulators over the timing of the 737 MAX’s return.
“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. Gurbir Grewal said. , director of the SEC’s enforcement division.