Boeing Updates: Here Is The Latest World News Update Today About: Boeing will pay $200 million to resolve claims that it misled investors on the 737 Max crashes.
In order to resolve allegations made by the US Securities and Exchange Commission (SEC) that US aircraft manufacturer Boeing misled investors by failing to disclose safety issues with its 737 Max jetliners following two fatal crashes of the aircraft, which resulted in the deaths of 346 people, Boeing will pay $200 million.
Following crashes of Boeing aircraft in 2018 and 2019, the SEC charged that Boeing and its former CEO Dennis Muilenburg made “materially false public statements.
Failures of the flight control system known as the Manoeuvring Characteristics Augmentation System were generally held responsible for the crashes involving Boeing 737 Max aircraft (MCAS).
SEC Chairman Gary Gensler said, “In times of crisis and tragedy, it is especially critical that public firms and leaders give full, fair, and transparent disclosures to the markets.”
THIS MOST FUNDAMENTAL DUTY WAS NOT FULFILLED BY BOEING OR ITS PREVIOUS CEO DENNIS MUILENBURG:
Despite being aware of major safety issues, they deceived investors by assuring them that the 737 Max was safe.
Following two incidents in Indonesia and Ethiopia in 2018 and 2019, respectively, in which 346 people perished, the 737 Max was grounded in 2019.
“There are no words to convey the sad loss of life brought on by these two aeroplane crashes,” SEC head Gary Gensler said. Public corporations and leaders should make comprehensive, equitable, and transparent disclosures to the marketplace whenever there is a crisis or tragedy.
Boeing and Mr. Muilenburg told the public that the 737 Max aircraft was “as safe as any aeroplane that has ever flown the skies” despite knowing after the initial tragedy that MCAS posed a continuing aircraft safety issue.
An official report from the Indonesian government that suggested that pilot error and subpar aircraft maintenance contributed to the crash was selectively highlighted by Boeing in a press release that was released one month after Lion Air Flight 610, a 737 Max jet, crashed in Indonesia in October 2018. Mr. Muilenburg edited and approved the release.
The press statement also provided reassurance on the safety of the aircraft but omitted to include that an internal safety review had shown that MCAS posed an ongoing “aeroplane safety issue” and that Boeing had already started rebuilding MCAS to fix its flaws.
When public firms and their leaders fail to uphold their core duties to the investing public, the SEC is nonetheless dedicated to rooting out malfeasance, according to Mr. Gensler.
Approximately six weeks after the March 2019 crash of Ethiopian Airlines Flight 302, another 737 Max, Mr. Muilenburg told analysts and reporters that “there was no surprise or gap… that somehow slipped through [the] certification process” for the 737 Max, despite being aware of information that called into question some aspects of the certification process relating to MCAS.
Additionally, he claimed that Boeing had “returned and affirmed again” that it had adhered strictly to the design and certification procedures that typically result in safe aeroplanes, according to the SEC statement.
Boeing and Mr. Muilenburg agreed to cease-and-desist orders with penalties of $200 million and $1 million, respectively, without acknowledging or disputing the SEC’s conclusions. For the benefit of mistreated investors, a Fair Fund will be created.
In an effort to repair Boeing’s reputation, “Boeing and Muilenburg put profits over people by deceiving investors about the safety of the 737 Max,” claimed Gurbir Grewal, director of the SEC’s enforcement division.
“However, under all circumstances, public firms and their leaders are required to disclose accurate and comprehensive information when they make disclosures to investors. If they don’t, we’ll hold them responsible.
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