Boeing reaches $200M settlement with federal regulators over 737 MAX crashes
SEATTLE - Boeing and its former CEO, Dennis Muilenburg, have reached a settlement with the Securities and Exchange Commission (SEC) over what the SEC says were "materially misleading" public statements following the deadly crashes involving 737 MAX Jets in 2018 and 2019.
According to the SEC’s orders, after the first crash, Boeing and Muilenburg knew that the Maneuvering Characteristics Augmentation System (MCAS) flight control system 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, SEC says.
157 people were killed aboard Flight 302 heading from Ethiopia to Kenya when a Boeing 737 MAX jet crashed six minutes after takeoff, creating a fallout of events for the aerospace giant.
Five months prior to that March 10, 2019 crash, another Boeing 737 MAX jet crashed in the Java Sea 13 minutes after takeoff, killing 189 people on October 29, 2018.
"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. "But public companies and their executives must provide accurate and complete information when they make disclosures to investors, no matter the circumstances. When they don't, we will hold them accountable, as we did here."
Without admitting or denying the SEC’s findings, Boeing and Muilenburg consented to cease-and-desist orders that include penalties of $200 million.