“In times of crisis and tragedy, it is especially important that public companies and executives provide full, honest and truthful disclosures to the markets,” SEC Chairman Gary Gensler said in a statement. “The Boeing Company and its former CEO, Dennis Muilenburg, failed in this most basic obligation. They misled investors by giving assurances about the safety of the 737 MAX, despite knowing of serious safety concerns.”
In a statement, Boeing said the settlement “completely resolves the SEC’s previously public investigation into matters relating to the 737 MAX accidents.”
“Today’s settlement is part of the company’s broader effort to resolve responsible legal matters related to the 737 MAX accidents in a manner that serves the best interests of our shareholders, employees and other stakeholders,” Boeing said.
The company and Muilenburg have agreed to settle charges of violating the anti-fraud provisions of US securities laws, but they have not admitted or denied the SEC’s allegations. Boeing agreed to pay 200 million dollars and Muilenburg agreed to pay 1 million dollars.
“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 after two tragic accidents that resulted in the loss of 346 lives and untold grief for so many families,” said Gurbir Grewal, director of the SEC’s Enforcement Division in a statement.
Investors have lost even more: Boeing’s market capitalization has fallen about 58%, or $115 billion, since the first crash of a 737 Max shortly after takeoff from Indonesia in October 2018. While about $100 billion of that happened in the pandemic era that has hurt the demand for flying and aircraft purchases, the longer ground of the Max opened the door for airlines to cancel hundreds of orders for the aircraft without penalty.