Boeing is to pay US$200 million in fines for providing misleading information to investors following the crashes of its 737 Max aircraft, which led to the deaths of 346 people in 2018 and 2019.
The fine settles charges brought against the aircraft manufacturer by the USA’s stock market regulator the Securities and Exchange Commission (SEC).
Boeing’s former CEO, Dennis Muilenburg has also settled the same charge of making materially misleading public statements with a fine of US$1 million.
Investigations led by regulators identified the 737 Max’s Maneuvering Characteristics Augmentation System (MCAS) as the main cause of the crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302 in 2018 and 2019.
The MCAS was added to the Max version of the 737 because of the heavier engines it uses and automatically compensates when it senses the aircraft is stalling by turning the nose of the plane down. The MCAS incorrectly operated when the crashes occurred.
According to the SEC after the first crash, Boeing and Muilenburg knew that MCAS posed an ongoing airplane safety issue, but nevertheless assured the public that the 737 MAX airplane was “as safe as any airplane that has ever flown the skies.” Later, following the second crash, Boeing and Muilenburg assured the public that there were no slips or gaps in the certification process with respect to MCAS, despite being aware of contrary information.
Chair of the SEC Gary Gensler said in a statement, “There are no words to describe the tragic loss of life brought about by these two airplane crashes.
“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. They misled investors by providing assurances about the safety of the 737 MAX, despite knowing about serious safety concerns.
Boeing paid US$2.5 billion in January 2021 to settle a criminal charge for conspiring to defraud the FAA’s Aircraft Evaluation Group about its 737 Max aircraft
The 737 Max returned to service at the end of 2020 in the USA and the start of 2021 in Europe after changes to the design of the aircraft and pilot training were made.
Clifford Law Offices represents 70 people aboard the March 2019 crash in Ethiopia as part of pending litigation in a federal district court in Chicago against Boeing. Robert Clifford, founder and senior partner of Clifford Law Offices said, “Muilenburg or anyone else who persuaded the government to keep the Boeing 737 Max flying should be fully investigated for conduct that could be criminal in nature.”
“That includes the government examining all communications made between parties at the corporation or to anyone outside of Boeing.”