Boeing Pays SEC Fees Over Misleading Investors • The Register

Boeing has agreed to pay $200 million to settle charges from the Securities and Exchange Commission (SEC) alleging the aviation giant misled investors about the safety of its 737 MAX plane.

The 737 MAX was involved in two crashes in 2018 and 2019 that killed everyone on board, now caused at least in part by flaws in the aircraft’s Maneuvering Characteristics Augmentation System (MCAS) software. Boeing acknowledged that MCAS played a role in both accidents.

MCAS should automatically intervene and help prevent the 737 Max from stalling in a specific flight scenario where the aircraft’s Angle of Attack (AoA) becomes too high. To do this, the trim of the airliner was adjusted and the nose of the plane was pushed down in 10-second blocks.

When MCAS is fed erroneous data from the aircraft’s AoA probe, it may erroneously decide that the aircraft is in danger of stalling and begin the coil at trim nose down. It turns out the pilots weren’t briefed on what MCAS is, how it works, or how to safely disable it.

The airliner Returned to service in 2021but not before software updates and significant investigations and fines over Boeing’s handling of the matter.

The $200 million to the SEC is little more than an administrative burden compared to that Over $2.5 billion Boeing has already had to pay fines and compensation, echoing statements by the company about the safety of the 737 MAX following the deadly crashes.

That SEC is holding on to thatA month after the first Lion Air Flight 610 crashed off the coast of Indonesia in October 2018, Boeing issued a press release approved by former CEO Dennis A. Muilenburg that “selectively emphasized certain facts from an official Indonesian government report that Pilot error and poor maintenance of the aircraft contributed to the crash. The press release also assured the aircraft’s safety without disclosing that an internal safety review had concluded that MCAS was an ongoing “aircraft safety issue” and that Boeing had already begun redesigning MCAS to address this issue.”

In other words, Boeing and Muilenburg knew MCAS was an ongoing safety concern, but reassured the public that the 737 MAX aircraft is “as safe as any plane that has ever flown the skies.”

About six weeks after the March 2019 crash of Ethiopian Airlines Flight 302 and grounding of the entire 737 MAX fleet, the SEC, Muilenburg, said “although it is aware of information that challenges certain aspects of the certification process related to MCAS , told analysts and reporters that there was no surprise or gap…that kind of slipped through [the] certification process’ for the 737 MAX and that Boeing ‘went back and reaffirmed… that we have followed the exact steps in our design and certification processes that consistently produce safe aircraft’.”

The SEC found that Boeing and Muilenburg “negligently violated the anti-fraud provisions of federal securities laws.” The company and the ex-CEO have agreed to cease and desist orders that include penalties of $200 million and $1 million, respectively, without admitting or denying the SEC’s findings. The money goes towards compensating investors.

SEC Chairman Gary Gensler said: “There are no words to describe the tragic loss of life caused by these two plane crashes. In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair and truthful disclosures about the markets.

“The Boeing Company and its former CEO, Dennis Muilenburg, have failed in this most fundamental of commitments. They misled investors by making assurances about the safety of the 737 MAX when they knew there were serious safety concerns. The SEC continues to work to publicly stamp out wrongdoing. Companies and their executives are failing to meet their fundamental obligations to the investing public.”

Gurbir Grewal, director of the SEC’s Enforcement Division, added: “Boeing and Muilenburg are putting profits over people by misleading investors about the safety of the 737 MAX in an attempt to rehabilitate Boeing’s image after two tragic accidents that killed 346 people Life came and immeasurable sadness for so many families.

“But public companies and their executives must provide accurate and complete information when making disclosures to investors, regardless of the circumstances. If they don’t, we will hold them accountable, as we have done here.”

A spokesman for Boeing said The registry: “We will never forget the losses of Lion Air Flight 610 and Ethiopian Airlines Flight 302, and we have made extensive and profound changes within our organization in response to these accidents – fundamental changes that have strengthened our safety processes and oversight of safety issues, and have enhanced our culture of safety, quality and transparency.

“The settlement announced today fully resolves the previously disclosed SEC investigation into matters related to the 737 MAX accidents. The settlement determines that Boeing neither admits nor denies the SEC’s factual statements regarding corporate statements made in late 2018 and early 2018.

“Today’s settlement is part of the company’s broader effort to resolve outstanding legal matters related to the 737 MAX accidents responsibly and in a manner that serves the best interests of our shareholders, employees and other stakeholders.” ® Boeing Pays SEC Fees Over Misleading Investors • The Register

Laura Coffey

World Time Todays is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – The content will be deleted within 24 hours.

Related Articles

Back to top button