Boeing To Pay $200M To Settle SEC Charges On Misleading About 737 MAX Safety

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  • Boeing Co (NYSE: BA) has agreed to pay $200 million to settle civil charges by the U.S. SEC that it misled public statements following crashes of airplanes in 2018 and 2019.

  • The crashes involved Boeing's 737 MAX airplane and a flight control function called the Maneuvering Characteristics Augmentation System (MCAS).

  • After the first crash, Boeing and its CEO Dennis A. Muilenburg, despite knowing that MCAS posed an ongoing airplane safety issue, assured the public that the 737 MAX airplane was "as safe as any airplane that has ever flown the skies."

  • Also, following the second crash, Boeing assured the public that there were no slips or gaps in the certification process with respect to MCAS.

  • Also ReadThis Company Beat Boeing, Lockheed To Win $1B US Air Force Missile Contract

  • "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," said SEC Chair Gary Gensler.

  • The SEC found the company and its CEO had negligently violated the antifraud provisions of federal securities laws.

  • Boeing and Muilenburg consented to cease-and-desist orders, including penalties of $200 million and $1 million, respectively.

  • "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," said Gurbir S. Grewal, Director of the SEC's Enforcement Division.

  • Price Action: BA shares are trading lower by 0.74% at $137.70 in premarket on the last check Friday.

  • Photo Via Company

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