“In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair, and truthful disclosures to the markets,” said SEC Chair Gary Gensler in a statement. “The Boeing Company and its former CEO, Dennis Muilenburg, failed in this most basic obligation. They misled investors by providing assurances about the safety of the 737 MAX, despite knowing about serious safety concerns.”
In a statement, Boeing said that the settlement “fully resolves the SEC’s previously disclosed inquiry into matters relating to the 737 MAX accidents.”
“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.
The company and Muilenburg agreed to settle charges of violating the antifraud provisions of US securities laws, but they did not admit or deny the SEC’s allegations. Boeing agreed to pay a $200 million settlement and Muilenburg agreed to pay $1 million.
“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 following two tragic accidents that resulted in the loss of 346 lives and incalculable grief to 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 plunged about 58%, or $115 billion, since the first crash of a 737 Max soon after take-off from Indonesia in October 2018. While about $100 billion of that has occurred in the pandemic era that has hurt demand for flying and aircraft purchases, the prolonged grounding of the Max opened the door for airlines to cancel hundreds of orders for the planes without penalty.