Boeing to pay $200 million for making misleading statements about safety of 737 Max

Sept. 23 (UPI) -- American aviation staple Boeing and its former CEO will pay more than $200 million to settle claims that they "put profits over people" and misled investors about the safety of the 737 Max after two of them crashed overseas and killed hundreds of people in 2019.

The deadly crashes occurred in the waters off Indonesia and in Ethiopia in late 2018 and early 2019 and prompted Boeing to ground the model worldwide for nearly two years.

Regulators with the Securities and Exchange Commission accused Boeing and former CEO Dennis Muilenburg with misleading investors about the safety of the airliner and its automated flight system that caused both crashes. On Thursday, regulators said that they agreed to settle the claims. Muilenburg, who left Boeing in late 2019, will pay $1 million.

The federal watchdog concluded that both Boeing and Muilenburg deliberately made the misleading statements about the 737 Max -- and that Muilenberg hid safety flaws of the automated MCAS flight system. However, he will not face charges and the settlement does not require him to admit to wrongdoing.

"In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair, and truthful disclosures to the markets," SEC Chairman Gary Gentler said in a statement Thursday. "The Boeing company and its former CEO, Dennis Muilenburg, failed in this most basic obligation."

Nadia Milleron, whose daughter Samya Stumo was killed in a crash involving the Boeing 737 Max, attends a hearing of the Senate transportation committee on Capitol Hill in Washington on October 29, 2019. File Photo by Pete Marovich/UPI

Neither Muilenberg nor Boeing disputed the government's findings, which noted that they "put profits over people by misleading investors about the safety of the 737 Max all in an effort to rehabilitate Boeing's image."

"Today's settlement is part of the company's broader effort to responsibly resolve outstanding legal matters related to the 737 Max accidents," the company said according to CNBC.

The SEC reprimanded Muilenberg for his comments calling the 737 Max "as safe as any airplane that has ever flown the skies," which also created some conflict between Boeing and the Federal Aviation Administration.

Boeing previously agreed to pay $2.5 billion to settle a criminal investigation by the Justice Department after congressional hearings that uncovered serious lapses in the plane's manufacturing and approval process. As a result, lawmakers passed reforms giving the FAA more power to oversee aircraft certification.

American, United, Southwest and Alaska Airlines are the only U.S. carriers that fly the 737 Max. Delta has ordered 100 737 Max 10 models, but none have been delivered yet.