Boeing will pay $200 million and then-CEO Dennis Muilenburg will pay $1 million to settle charges over misleading investors in the wake of two deadly crashes of 737 Max jetliners, the Securities and Exchange Commission said Thursday.
Shares fell about 2% in premarket trading Friday.
“In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair, and truthful disclosures to the markets. The Boeing Company and its former CEO, Dennis Muilenburg, failed in this most basic obligation,” SEC Chair Gary Gensler in a statement.
The two crashes — one in October 2018 and another in March 2019 — killed all 346 people aboard the two flights and led to a worldwide grounding of the jetliners. The grounding was first lifted in late 2020.
Boeing fired Muilenberg in December 2019 in the midst of the planes’ extended grounding and comments about when he expected regulators to clear the planes to fly again. The comments also strained the manufacturer’s relationship with the Federal Aviation Administration, prompting public admonishment by the regulator.
“Today’s settlement is part of the company’s broader effort to responsibly resolve outstanding 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 in a statement.
Neither Boeing nor Muilenburg admitted nor denied the SEC’s findings, the agency said.
In January 2021, Boeing agreed to pay $2.5 billion to settle a criminal probe with the Justice Department over the planes.
Two damning congressional investigations after the crashes found management, design and regulatory lapses in the 737 Max’s development and certification. That led to new legislation to reform aircraft certification, giving more control over the process to the FAA.