Boeing to pay $200 million for misleading investors about plane safety

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Boeing has agreed to pay $200m (£178m) to settle allegations it misled investors about the safety of its 737 Max jet.

The model was grounded for 20 months in 2019 following two fatal crashes – one in Indonesia and the other in Ethiopia – that killed a total of 346 people.

The Securities and Exchange Commission (SEC) charged the plane maker and its former CEO Dennis Muilenburg with making material public statements about the plane and the automated flight control system involved in the crash.

Boeing knew the system posed a safety problem after the first crash, but assured the public the plane was “as safe as any that has ever taken to the skies,” the SEC said.

Not even one Boeing neither Muilenburg admitted wrongdoing, but they agreed to orders that included penalties of $200m for the company and $1m (£889,995) for the former boss.

Muilenburg was fired in December 2019 after Boeing disputed with regulators over the timing of the 737 Max’s return to service.

The SEC said they also falsely claimed that there was no loophole in the plane’s certification process at all.

“Boeing and Muilenburg are putting profits before people by misleading investors about the safety of the 737 Max in order to rebuild Boeing’s image” after the crashes, said Gurbir Grewal, director of the SEC’s enforcement division.

Image:
In 2019, investigators searched through the debris at the crash site of Ethiopian Airlines Flight ET 302

A fund will be set up to benefit injured investors, the SEC added, sending Boeing shares up 0.4 percent in after-hours trading.

Boeing said it had made “fundamental changes that strengthened” its safety procedures, explaining that “the settlement is part of the company’s broader efforts to responsibly resolve outstanding legal matters” related to the crash.

Read more:
Lion Air: A look at the deadly past of an Indonesian airline
A plane with 132 passengers and crew members crashed in China

The first Lion Air crash in Indonesia occurred in October 2018, and the second incident occurred less than six months later in Ethiopia in March 2019.

Last year, Boeing admitted liability for damages in lawsuits filed by the families of 157 people killed.
in an accident in 2019.

Some trials are expected to begin in 2023 to help resolve the claims.

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