The Securities and Exchange Commission announced Thursday that Boeing will pay $200 million and former CEO Dennis Muilenburg will pay $1 million to resolve claims that they misled investors following two fatal 737 Max crashes.
“It is crucial for public firms and leaders to give the markets comprehensive, accurate, and transparent disclosures during times of crisis and tragedy. The Boeing Company and Dennis Muilenburg, its former CEO, failed in this most fundamental duty, according to SEC Chair Gary Gensler.
All 346 passengers on board the two catastrophes, which occurred in October 2018 and March 2019, were killed. The crashes also caused the jetliners to be grounded globally. In late 2020, the grounding was initially lifted.
In the midst of the prolonged grounding of the planes and Muilenberg’s comments on when he anticipated regulators would give the planes the all-clear to resume flying, Boeing sacked him in December 2019. The manufacturer’s relationship with the Federal Aviation Administration was also damaged as a result of the statements, leading to the regulator’s public censure.
According to a statement from Boeing, “Today’s resolution is part of the company’s broader endeavour to appropriately resolve remaining legal proceedings connected to the 737 MAX accidents in a way that serves the best interests of our shareholders, employees, and other stakeholders.”
According to the SEC, neither Boeing nor Muilenburg have acknowledged nor rejected its findings.
In order to end a criminal investigation into the planes with the Justice Department, Boeing agreed to pay $2.5 billion in January 2021.
Following the crashes, two devastating congressional investigations uncovered oversights in management, design, and regulation during the development and certification of the 737 Max. As a result, the FAA was given increased authority over the certification process through new laws.