SEATTLE - Boeing has agreed to pay $200 million to settle with the US Securities and Exchange Commission (SEC) who said it misled investors concerning the fatal crashes of the 737 Max aircraft in 2018 and 2019.
The SEC said the plane maker and its former chief Dennis Muilenburg made “materially misleading public statements” following the crashes that killed 346 people.
The crashes involved Boeing’s 737 Max airplane and a flight control function called the Maneuvering Characteristics Augmentation System (MCAS).
After the Lion Air crash in October 2018, Boeing and Muilenberg assured the public that the 737 Max aircraft was safe – despite knowing that the MCAS posed an ongoing airplane safety issue, the SEC said on Thursday.
The same public assurance was made after the second crash involving Ethiopian Airlines.
“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 said.
“They misled investors by providing assurances about the safety of the 737 MAX, despite knowing about serious safety concerns,” he added.
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After the Lion Air crash, Boeing issued a press release, edited and approved by Muilenburg that “selectively highlighted certain facts from an official report of the Indonesian government.”
The statement suggested that pilot error and poor aircraft maintenance contributed to the crash, giving assurances of the airplane’s safety.
“Boeing and Muilenburg put profits over people by misleading investors about the safety of the 737 MAX all in an effort to rehabilitate Boeing’s image following two tragic accidents that resulted in the loss of 346 lives and incalculable grief to so many families,” Gurbir S. Grewal, director of the SEC’s enforcement division, said.
The SEC order found Boeing and Muilenberg found the two violated the antifraud provisions of federal securities laws.
Boeing will pay $200 million, while the former CEO will pay $1 million.