Boeing has agreed to pay $200 million (£178m) to settle allegations that it misled investors about the safety of its 737 Max plane.
The model was grounded for 20 months back in 2019 after two fatal crashes – one in Indonesia and the other in Ethiopia – killing a total of 346 people.
The Securities and Exchange Commission (SEC) charged the aircraft maker and its former chief executive Dennis Muilenburg with making significant public statements about the plane and an automated flight-control system that was implicated in the crashes.
Boeing knew after the first crash that the system posed a safety issue, but assured the public that the plane was “as safe as any that has ever flown the skies,” the SEC said.
Neither Boeing nor Muilenburg admitted wrongdoing, but they agreed to orders that include penalties of $200m dollars for the company and $1m (£889,995) for the former boss.
Muilenburg was fired in December 2019 after Boeing clashed with regulators over the timing of the 737 Max’s return to service.
The SEC said they also falsely claimed that there had been no gaps in the process of certifying the plane in the first place.
“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 the crashes, said Gurbir Grewal, director of the SEC’s enforcement division.
A fund will be established for the benefit of harmed investors, the SEC added, which saw Boeing shares rise 0.4% in after-hours trading.
Boeing said it had made “fundamental changes that have strengthened” its safety processes and explained that the”settlement is part of the company’s broader effort to responsibly resolve outstanding legal matters” related to the crashes.
The first crash, of a Lion Air flight in Indonesia, occurred in October 2018, with the second incident taking place less than six months later in Ethiopia in March 2019.
Last year, Boeing acknowledged liability for compensatory damages in lawsuits filed by families of the 157 people killed
in the 2019 crash.
A few trials are expected to begin in 2023 to help resolve claims.