'Put profits over people': US fines Boeing $200 MILLION for misleading investors over the safety of 737 MAX planes after two deadly crashes killed nearly 350 people
- Boeing is to pay $200 million to settle civil charges by the U.S. Securities and Exchange Commission that it misled investors about its 737 MAX
- Plane was grounded for 20 months after two fatal crashes that killed 346 people
- Boeing knew after the first crash that a flight control system posed a safety issue
- It assured the public that the 737 MAX airplane was 'as safe as any that has ever flown the skies'
- SEC also said former Boeing Chief Executive Dennis Muilenburg had agreed to pay $1 million to settle charges
US securities officials have fined Boeing $200million over the aviation giant's misleading assurances about the safety of the 737 MAX airplane following two deadly crashes.
Boeing agreed to the penalty to settle charges it 'negligently violated the antifraud provisions' of US securities laws, the Securities and Exchange Commission said in a statement, saying the company and its leader 'put profits over people.'
Boeing's former chief executive, Dennis Muilenburg, also agreed to pay $1 million to settle the same charges in the civil case.
The settlement marks the latest hit to Boeing over the MAX following the Lion Air Crash in Indonesia in October 2018 and the Ethiopian Airlines crash in Ethiopia in March 2019, which together claimed nearly 350 lives.
US securities officials fined Boeing $200 million over the aviation giant's misleading assurances about the safety of the 737 MAX airplane following two deadly crashes, regulators announced Thursday. Pictured, Boeing 737 MAX aircraft are seen parked in an aerial photo at Boeing Field in Seattle ready to be delivered
Securities and Exchange Commission (SEC) Chair Gary Gensler charged Boeing and Muilenburg 'with making materially misleading public statements following crashes of Boeing airplanes in 2018 and 2019
Dennis Muilenburg, Boeing's former chief executive, has agreed to pay $1 million to settle the same charges in the civil case
Boeing Max 737's two deadly crashes: What happened?
Boeing was forced to ground the 737 Max after the crashes in Indonesia and Ethiopia happened less than six months apart.
The first disaster happened October 29, 2018, when a Max flying as Lion Air flight JT 610 fell into the Java Sea 15 minutes after taking off from Jakarta.
All 189 aboard the plane died, including 180 Indonesians, one Italian and one Indian.
The second crash occurred on March 10, 2019, when Ethiopian Airlines Flight ET 302, which also was a Max jet, took off from Bole International Airport in the Ethiopian capital and crashed.
All 157 people onboard the plane died.
US carriers American, United and Southwest had to cancel flights for the holidays, including over Christmas and into the new year, after the plane was grounded around the world.
Boeing reported on July 14, 2019, that customers canceled orders for 60 of the grounded 737 MAX jets in June.
The aircraft maker removed another 123 planes from its backlog over doubts that the deals will be completed.
One month after the first crash, a Boeing press release approved by Muilenburg 'selectively highlighted certain facts,' implying pilot error and poor aircraft maintenance contributed to the crash.
The press release also attested to the aircraft's safety, not disclosing that Boeing knew a key flight handling system, the Maneuvering Characteristics Augmentation System (MCAS), posed safety issues and was being redesigned.
After the second crash, Boeing and Muilenburg assured the public that there was 'no surprise or gap' in the federal certification of the MAX despite being aware of contrary information, the SEC said.
'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 press release.
'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.'
The SEC said both Boeing and Muilenburg, in agreeing to pay the penalties, did not admit or deny the agency's findings.
Boeing said the agreement 'fully resolves' the SEC's inquiry and 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,' a company spokesman said.
'We will never forget those lost on Lion Air Flight 610 and Ethiopian Airlines Flight 302, and we have made broad and deep changes across our company in response to those accidents.'
The crash of the Nairobi-bound Boeing 737 MAX six minutes after takeoff on March 10, 2019, killed all 157 people on board. Pictured, wreckage is piled at the crash scene of Ethiopian Airlines flight ET302 near Bishoftu, Ethiopia
US air safety authorities cleared Boeing's 737 MAX to resume service in November 2020 following a 20-month grounding after the crashes.
A principal cause of the two crashes was identified as the MCAS, which was supposed to keep the plane from stalling as it ascended but instead forced the nose of the plane downward. The Federal Aviation Administration required Boeing to upgrade this system to address the flaw.
In January 2021, Boeing agreed to pay $2.5 billion to settle a US criminal charge over claims the company defrauded regulators overseeing the 737 MAX.
BOEING'S 737 MAX: WHAT WENT WRONG
OCT. 29, 2018 - A Lion Air 737 MAX plane crashes in Indonesia, killing all 189 people on board
NOV. 13, 2018 - FAA, Boeing say they are evaluating the need for software or design changes to 737 MAX jets following the Lion Air crash
NOV. 30, 2018 - Boeing is weighing plans to launch a software upgrade for its 737 MAX in six to eight weeks that would help address a scenario faced by crew of Indonesia's Lion Air, sources told Reuters
MARCH 10, 2019 - An Ethiopian Airlines 737 MAX crashes, killing all 157 people on board
MARCH 12, 2019 - FAA says will mandate that Boeing implement design changes on the 737 MAX by April that have been in the works for months
MARCH 13, 2019 - FAA joins other major global regulators in grounding the 737 MAX, citing evidence of similarities between the two fatal crashes
APRIL 6, 2019 - Boeing says it will cut monthly 737 MAX production by nearly 20%; U.S. and airline officials say they believe the plane could be grounded for at least two months
MAY 16, 2019 - Boeing says it has completed a software update for its 737 MAX jets and is in the process of submitting a pilot training plan to the FAA
JUNE 27, 2019 - Boeing says it will take until at least September to fix a newly identified problem with software that emerged when FAA test pilots were reviewing potential failure scenarios of the flight control computer in a 737 MAX simulator
JULY 18, 2019 - Boeing says it has assumed regulatory approval of the 737 MAX's return to service in the United States and other jurisdictions will begin early in the fourth quarter
OCT. 24, 2019 - Boeing says it still expects FAA approval to fly the 737 MAX in the fourth quarter, sending its shares higher despite a slump in quarterly profit. FAA says it will need "several weeks" for review
NOV. 7, 2019 - U.S. and European regulators ask Boeing to revise documentation on its proposed 737 MAX software fix
NOV. 11, 2019 - Boeing says it expects the FAA to issue an order approving the plane's return to flight in December, forecasting commercial flights to resume in January
NOV. 15, 2019 - The head of the FAA tells his team to 'take whatever time is needed' in their review of the 737 MAX
DEC. 11, 2019 - FAA chief Steve Dickson says 737 MAX will not be cleared to fly before the end of 2019
DEC. 12, 2019 - Boeing abandons its goal of winning regulatory approval for the 737 MAX to resume flying in December after the U.S. Federal Aviation Administration (FAA) said the plane would not be cleared to fly before 2020
DEC. 23, 2019 - Boeing fires CEO Dennis Muilenburg
JAN. 6, 2020 - An audit conducted in December reveals that wiring in the tail of the 737 MAX could short circuit and lead to a crash if pilots don't know how to respond correctly
JAN. 9, 2020 - Boeing releases hundreds of internal messages between employees to the Congress and the FAA last week, raising serious questions about its development of simulators and showing employees may have covered up issues
JAN. 13, 2020 - Budget airliner Ryanair reveals it could receive its first deliveries of up to 10 grounded 737 MAX aircraft from Boeing by April, but cautions this will depend on the regulators
JAN. 16, 2020 - Committee, appointed by Transportation Secretary Elaine Chao in April, finds the FAA safety approval process was not at fault
JAN. 21, 2020 - Boeing announces it does not expect federal regulators to approve its changes to the grounded 737 Max until this summer, several months longer than the company was saying just a few weeks ago
NOV. 18, 2020 - The FAA rescinds the order that halted commercial operations of the 737 Max
DEC. 29, 2020 - American Airlines Flight 718, which left Miami around 10:30am and landed after 1pm in New York, becomes the first commercial flight of the Boeing 737 Max
JAN. 7, 2021 - Boeing agrees to pay more than $2.5 billion in a legal settlement with the Justice Department stemming from the 737 Max debacle. The agreement resolves a criminal charge that Boeing conspired to defraud the Federal Aviation Administration, which regulates the company and evaluates its planes. Boeing will establish a $500 million fund to compensate the families of those who died and pay a fine of nearly $244 million. The company will also pay $1.77 billion in compensation to its airline customers who were unable to use or take deliveries of the Max, which remains grounded in some parts of the world.
REVEALED: United Airlines grounded 25 Boeing 777-200s after failing to check their wings - days before flight from Newark forced into emergency landing due to a 'hydraulic issue'
United Airlines revealed Wednesday it grounded about 25 of its Boeing 777-200 planes - just days before one of them was forced to turn back only minutes after taking off.
United grounded dozens of the planes after realizing that some of its aircraft had not undergone required inspections of the front edges of the wings, or the wing slats.
It led to the airline canceling flights on Monday night and Tuesday morning. Those passengers affected were rebooked.
But on Wednesday night, a 777-200 aircraft that had been cleared to fly was forced to turn back after taking off from Newark Airport in New Jersey following an issue with its hydraulic system. The wing slats are part of the hydraulic system.
The FAA has launched an investigation into the incident but United has not commented if the issue is at all connected to the grounding of similar aircraft.
The Federal Aviation Administration explained how United grounded 25 of the jets after discovering it had failed to inspect slats on the wing edges that are used during takeoffs and landings.
The FAA said United reported the issue, and the FAA is reviewing circumstances that led to the missed inspections.
United Airlines has grounded 25 of its Boeing 777-200 airplanes from service after not fulfilling the required inspections of the front edges of the wings
United said earlier this week afternoon that it had inspected 10 of the planes and was working with the FAA to return the others to flying in the next two weeks without causing additional flight cancellations.
'We've completed inspections on 10 of those aircraft, and are working with the FAA to return others to service while inspections are ongoing over the next two weeks,' United said in a statement.
The FAA said it was reviewing United's inspection plan 'as well as looking into the circumstances that led to the missed inspections.'
In May, the FAA cleared United's 52 Boeing 777 planes equipped with Pratt & Whitney (PW) 4000 engines to return to service.
The jets were grounded after the failure of a Pratt & Whitney engine on one that caused parts of the housing to fall on the Denver area.
United Airlines discovered it had failed to perform required inspections on the wing leading-edge panels, the FAA, a U.S. regulator said
The United flight to Honolulu suffered engine failure and showered debris over nearby cities and made an emergency landing in February 2021.
A loud bang was heard just four minutes after take off and pieces of the engine began to plummet to the ground over Broomfield, Colorado.
Jet engine parts were scattered around the entire suburb, with the entire engine inlet lip ending up in one piece in a resident's front yard.
No one was injured and the plane safely returned to the airport.
United said that he wing leading-edge panel inspections of some of those 777-200s are not related to engines or recent engine work.
They said the inspections in most cases can be completed overnight.
United's Boeing 777s are some of the oldest models of their kind in the world.
The 777 planes seat between 276 and 364 passengers, according to United's website, and are mostly used on long international flights.
Video of what was thought to be a United Airlines Boeing 777 shedding debris and showers of sparks was caught on Wednesday night after it took off from Newark Airport in New Jersey
Meanwhile, the FAA has launched an investigation after a United plane was forced to make an emergency landing when a shower of sparks flew off and debris fell to the ground moments after taking off from Newark Airport in New Jersey.
The Boeing 777-200ER, which took off from Newark heading for Sao Paulo, Brazil, at 11.24pm on Wednesday night had to enter a holding pattern at 24,000 feet over the Atlantic Ocean after experiencing what is suspected to be a hydraulic pressure pump failure on landing the landing gear.
Approximately an hour and a half later, after dumping fuel over the ocean to reduce weight, the aircraft made a safe emergency landing back at Newark Airport.
The FAA have now confirmed they are probing the cause of the malfunction.
The terrifying moment was purportedly caught on video by a nearby plane spotter, who captured the shower of sparks streaming from close to the landing gear compartment of the Boeing 777.
He also took a photograph of a piece of rectangular, rusty-looking piece of debris that fell to the ground.
Despite the dramatic scenes, the plane landed safely after the crew reported an emergency and that an investigation is under way.
There were no reports of any casualties or injuries among the crew and passengers.
A photo of the debris that fell from the plane was captured by a nearby plane spotter. The Federal Aviation Administration confirmed they are investigating the incident
In a statement, United Airlines said: 'After our aircraft experienced a mechanical issue shortly after takeoff, it remained in the air to burn fuel and then landed safely.
'Passengers deplaned at the gate and a new aircraft is scheduled to depart this morning.'
The FFA said: 'United Airlines Flight 149, a Boeing 777-200, landed safely at Newark Liberty International Airport shortly before 1am local time today after the crew reported an emergency.
'The flight departed Newark and was headed to São Paulo, Brazil before it returned. The FAA will investigate.'
Boeing 777s are equipped with three hydraulic systems. The left, center and right systems deliver hydraulic fluid at a rated pressure to operate flight controls, flap systems, actuators, landing gear and brakes.
Primary hydraulic power for the left and right systems is provided by two engine-driven pumps and supplemented by two on-demand electric motor-driven pumps, according to power company Eaton.
The flight map shows flight UA149 entering a holding pattern at 24,000 feet over the Atlantic after experiencing what is suspected to be a hydraulic pressure pump failure