Boeing has agreed to pay $200 million to settle charges for misleading investors in connection with the two 737 Max crashes. As part of the agreement, the former CEO, Dennis Muilenburg, will pay $1 million in addition to the aerospace manufacturer’s $200 million fine.
The US Securities and Exchange Commission (SEC) charged Boeing last week and its former chief executive with misleading the public after the 2018 crash in Indonesia and the 2019 crash in Ethiopia. 346 people lost their lives in the two fatal crashes.
According to the SEC, when Muilenburg read a draft of the press release following the first crash, he suggested deleting the section related to a software update to their faulty flight control system and instructed his subordinates to copy the Indonesian government report into the text on pilot errors and maintenance details indicating problems.
Muilenburg then stated after the second accident in 2019 that everything was in order with the papers confirming the tests of the 737 Max. Before that, however, the chief technical pilot, Mark Forkner, could admit in a statement that he had misled the authorities.
The crashes were caused by the flight control system called the Maneuvering Characteristics Augmentation System (MCAS). According to 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 that has ever flown the skies.’
Boeing and Muilenburg neither admitted nor denied the allegations. The Federal Aviation Administration (FAA) allowed the 737 Max aircraft to fly again in November 2020.
Since the two accidents, the company’s share price has been moving in downtrend:
Source: Reuters