Boeing agrees to pay $200 million for misleading the public about the 737 Max
September 23, 2022 at 12:36
New York CNN Business —Boeing and its former CEO Dennis Muilenburg agreed to pay hefty fines to settle charges from the Securities and Exchange Commission that they misled the public about the safety of the 737 Max following two fatal crashes in 2018 and 2019.
The SEC alleges that, following an October 2018 crash of a Lion Air 737 Max jet that killed 189 people, Boeing and Muilenburg knew that part of the plane’s flight control system posed an ongoing safety concern yet told the public that the 737 Max was safe to fly.
After a March 10, 2019 fatal 737 Max crash, the SEC alleges that Boeing and Muilenburg knowingly misled the public about “slips” and “gaps” in the certification process of that flight control system.
“The Boeing Company and its former CEO, Dennis Muilenburg, failed in this most basic obligation.
The company and Muilenburg agreed to settle charges of violating the antifraud provisions of US securities laws, but they did not admit or deny the SEC’s allegations.
Boeing agreed to pay a $200 million settlement and Muilenburg agreed to pay $1 million.
Muilenburg lost the top job at Boeing in December 2019.
But he left with stock options and other assets worth about $80 million at that time — though Boeing shares have lost more than half their value since then.
It is unknown what Muilenburg did with his Boeing shares and options after his departure.
So the $200 million fine represents less than 1% of its previously disclosed losses.
Investors have lost even more: Boeing’s market capitalization has plunged about 58%, or $115 billion, since the first crash of a 737 Max soon after take-off from Indonesia in October 2018.
Shares of Boeing (BA) fell more than 3% Thursday but rose slightly in after-hours trading following the SEC’s announcement.