Boeing shares have fallen 68% from their all-time high set just before the second MAX incident in early March 2019. Furthermore, Boeing is paying $200 million in settlement over misleading investors on the 737 Max’s safety.
In response to claims that the aircraft maker and its former CEO misled investors and the general public about the safety of the 737 MAX airliner, which crashed twice and killed 346 people, Boeing Co. negotiated a $200 million agreement with the Securities and Exchange Commission on Thursday.
Former CEO of Boeing Dennis Muilenburg consented to pay the SEC $1 million as part of a settlement. The SEC claims that following the initial 737 MAX incident, Muilenburg was aware of a flight control feature known as the Maneuvering Characteristics Augmentation System as a persistent safety concern but reassured the public that the aircraft was airworthy.
Here is a description of how the MCAS operates:
Following the second incident, Muilenburg and Boeing informed the public that there were holes in the MCAS flight control system certification procedure, despite the SEC suggesting “contrary information.”
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The settlement disclosed by the SEC on Thursday is predicated on claims made to Wall Street by the former executive and aircraft company.
The Justice Department discovered in a separate criminal investigation that a former Boeing pilot misled aviation safety authorities about how the MAX’s MCAS functioned. In a court deal with the DOJ, Boeing agreed to pay $2.5 billion, with a portion of that sum going to the relatives of those who perished in the two MAX crashes.
Current and past firm directors accepted a $237.5 million settlement with shareholders last year on the board’s failure to oversee the MAX.
Meanwhile, Boeing shares have fallen 68% from their all-time high set just before the second MAX incident in early March 2019.
Boeing’s best-selling aircraft was suspended for 20 months before flying again in November 2020.