Boeing Pays $200 Million to Settle with Investors After 737 Max Crashes

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Boeing has announced it will pay $200 million to settle charges brought by the Securities and Exchange Commission over misleading investors after two 737 Max planes crashed and the company grounded the planes to fix software issues believed to have been responsible for the crashes, leaving Boeing’s stock price in question.

Image Source- DW

The Securities and Exchange Commission said Thursday that Boeing would pay $200 million and former CEO Dennis Muilenburg will pay $1 million to resolve claims that they misled investors following two fatal 737 Max accidents.

In Friday’s premarket trade, shares decreased by almost 2%.

“In times of crisis and tragedy, it is essential for public businesses and leaders to provide the markets with thorough, accurate, and transparent disclosures. According to Gary Gensler, chairman of the SEC, the Boeing Company and Dennis Muilenburg, its former CEO, failed in this most basic responsibility.

The two disasters, which happened in October 2018 and March 2019, each carried 346 people, all of whom perished. Additionally, the crashes led to a worldwide grounding of aircraft. The grounding was initially taken out in late 2020.

Boeing fired him in December 2019 in the midst of the jets’ protracted grounding and Muilenberg’s predictions about when regulators would give the planes the go-ahead to start flying. The remarks also harmed the manufacturer’s relationship with the Federal Aviation Administration, which resulted in the regulator’s public rebuke.

The company’s greater effort to responsibly manage ongoing legal procedures related to the 737 MAX crashes in a way that serves the best interests of our shareholders, employees, and other stakeholders, according to a statement from Boeing, is part of today’s settlement.

According to the SEC, neither Boeing nor Muilenburg have acknowledged nor rejected its findings.

In order to end a criminal investigation into the jets with the Justice Department, Boeing agreed to pay $2.5 billion in January 2021.

Following the disasters, two devastating congressional investigations uncovered oversights in management, design, and regulation throughout the development and certification of the 737 Max. As a result, the FAA was given increased authority over the certification process through new laws.

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