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Boeing Co BA.N will pay $200 million to settle civil charges from the U.S. Securities and Exchange Commission for misleading investors about its 737 MAX, which was grounded for 20 months after two crashes mortals killed 346 people, the agency said on Thursday.

The SEC also said former Boeing chief executive Dennis Muilenburg agreed to pay $1 million.

“In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair and truthful information to the markets,” SEC Chairman Gary Gensler said in a statement. He added that Boeing and Muilenburg “failed this most fundamental obligation.”

The SEC said Boeing and Muilenburg neither admitted nor denied the SEC’s findings. The regulatory agency said a fund will be set up to benefit aggrieved investors.

The SEC accused Boeing and Muilenburg “of making materially misleading public statements following the Boeing plane crashes in 2018 and 2019.”

Boeing confirmed the settlement and noted that it neither admits nor denies wrongdoing. He said he made “fundamental changes that have strengthened our safety processes” and said “the settlement is part of the company’s broader efforts to responsibly resolve outstanding legal issues related to the 737 MAX accidents. “.

The crashes were related to a flight control system called the Maneuvering Characteristics Augmentation System (MCAS). The SEC said that “after the first crash, Boeing and Muilenburg knew that MCAS was an ongoing aircraft safety problem, but nevertheless assured the public that the 737 MAX aircraft was “as safe as anything that has ever flown in the sky “”.

After the second crash, the SEC said: “Boeing and Muilenburg have assured the public that there were no slippages or gaps in the certification process with respect to MCAS, although they were aware information to the contrary.”

In January 2021, Boeing agreed to pay $2.5 billion in fines and compensation to resolve a U.S. Department of Justice criminal investigation into the 737 MAX crashes.

The Justice Department settlement that saved Boeing from lawsuits included a $243.6 million fine, $1.77 billion in airline compensation and a $500 million fund for the victims of the crash on fraud conspiracy charges related to the aircraft’s faulty design.

In December 2019, Boeing fired Muilenburg after the company clashed with regulators over when to return the 737 MAX to service.

“Boeing and Muilenburg put profits before people by misleading investors about the safety of the 737 MAX in an effort to rehabilitate Boeing’s image following two tragic crashes that left 346 people dead and heartbreak incalculable for so many families,” said Gurbir Grewal. , director of the SEC’s Enforcement Division.

(Reuters)

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