Boeing shareholder files class-action suit over fallout from 737 MAX crashes

Boeing shareholder files class-action suit over fallout from 737 MAX crashes

According to the WSJ, it has been granted a broad mandate to study and certify the 737 MAX's safety; in particular, fixing the plane's Maneuvering Characteristics Augmentation System (MCAS), which has been identified as the possible cause of the Lion Air and Ethiopian Airlines tragedies.

Boeing shareholders have filed a class action lawsuit against the aircraft maker, accusing it of withholding information on safety deficiencies in its 737 MAX planes which led to two deadly crashes within six months.

Boeing is updating its software to fix the problem detected in both of the 737 MAX plane crashes. In addition to Boeing, CEO Dennis Muilenburg and Chief Financial Officer Gregory Smith are named as defendants.

It alleges that Boeing "effectively put profitability and growth ahead of airplane safety and honesty", misleading investors about its core commercial-airplanes operation. By doing so, investors bought shares at "artificially inflated prices".

The lawsuit, seen by Reuters, seeks damages for alleged securities fraud violations, as the latest crash of Boeing's 737 MAX 8 jet, operated by Ethiopian Airlines, wiped about $34 billion out of the company's market value.

Boeing did not immediately respond to a request for comment.

The family of one passenger, 24-year-old Samya Stumo, filed a wrongful death lawsuit against the company. In all, 346 people died.

Its stock hit $440 early last month, then fell to $362 after the Ethiopian Airlines crash.

To get its 737 MAX jets, which have been grounded worldwide, back in the air, the US-based corporation needs approval from the US Federal Aviation Administration.

The lawsuit said that Boeing should have told investors that the safety features were optional on the Max jets it sold. Pilots on each flight fought unsuccessfully to regain control, according to flight data retrieved from the planes. The company is also facing probes by the U.S. Justice Department and the Transportation Department's inspector general.

The FAA has for decades delegated some certification duties to Boeing and other manufacturers.



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