DALLAS – The US Securities and Exchange Commission (SEC) announced Thursday that Boeing will pay US$200m and former CEO Dennis Muilenburg will pay US$1m to resolve claims that they misled investors following two fatal 737 MAX crashes.
The 346 passengers on board the two Boeing 737 MAX aircraft perished in the October 2018 and March 2019 crashes, which caused the jetliners to be grounded globally. In late 2020, the grounding was initially lifted.
In the midst of the prolonged grounding of the planes and the former CEO’s comments on when he anticipated regulators would give the planes the all-clear to resume flying, Boeing sacked Muilenberg in December 2019. The manufacturer’s relationship with the Federal Aviation Administration (FAA) was also damaged as a result of the statements, leading to the regulator’s public censure.
Following the crashes, two devastating congressional investigations uncovered oversights in management, design, and regulation during the development and certification of the 737 Max. As a result, the FAA was given increased authority over the certification process through new laws.
We can recall that Boeing agreed to pay US$2.5bn in January 2021 to end a criminal investigation into the planes with the Justice Department.
Comments from the SEC, Boeing
“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,” SEC Chair Gary Gensler in a statement.
“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,” Boeing said in a statement.
According to the SEC, neither Boeing nor Muilenburg admitted nor denied the SEC’s findings.
Featured image: Two Boeing 737 MAX sit outside the factory in Renton and are being prepared for first flights. – Brandon Farris/Airways