Boeing Stock (NYSE:BA)
On Thursday, Boeing stock plunged after the Securities and Exchange Commission said that Boeing (NYSE:BA) would pay $200 million in a settlement to resolve accusations of misleading investors following two deadly disasters involving 737 MAX planes. Dennis Muilenberg, the company’s ex-CEO, will pay $1 million to resolve the lawsuit.
Boeing (NYSE:BA) claimed that the SEC’s “previously reported probe into topics related to the 737 MAX crashes is entirely resolved” due to the settlement announced today. Boeing “does not accept or reject the findings in the SEC’s statement of facts, which relate to corporate statements made by Boeing in late 2018 and early 2019,” per the settlement’s terms.
After the 346 persons on board were killed in two separate incidents in 2018 and 2019, narrowbody planes were grounded worldwide. Boeing stock was on a roller coaster ride during these times. It has been two years since the 737 MAX made its inaugural flight again.
“In times of crisis and tragedy, it is especially critical that public firms and leaders offer complete, fair, and transparent disclosures to the markets,” said Gary Gensler, chairman of the SEC. “Dennis Muilenburg, Boeing (NYSE:BA) previous CEO, and the company failed miserably in this fundamental responsibility. When investors were asked about the 737 MAX, they gave them false promises about the plane’s safety even though they were aware of major flaws.”
In the last moments of trade, Boeing stock remained unchanged, with a price near the $138.71 it had closed earlier. Compared to the 22% decline in the S&P 500 Stock Index, this stock is down 33% this year (SP500).
After the aircraft manufacturer’s market value dropped by billions, the SEC looked into how the firm informed investors about the crashes and how it responded to the issue. Publicly traded corporations are subject to disclosure regulations that the agency enforces.
The Justice Department’s criminal investigation into the 737 MAX was settled with Boeing’s (NYSE:BA) $2.5 billion payment in January 2021.
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