Boeing shareholders sue over 737 MAX crashes and disclosures
The proposed class action filed in Chicago federal court seeks damages for alleged securities fraud violations, after Boeing’s market value tumbled by $34 billion within two weeks of the March 10 crash of an Ethiopian Airlines 737 MAX.
Chief Executive Dennis Muilenburg and Chief Financial Officer Gregory Smith were also named as defendants.
According to the complaint, Boeing “effectively put profitability and growth ahead of airplane safety and honesty” by rushing the 737 MAX to market to compete with Airbus SE, while leaving out “extra” or “optional” features designed to prevent the Ethiopian Airlines and Lion Air crashes.
It also said Boeing’s statements about its growth prospects and the 737 MAX were undermined by its alleged conflict of interest from retaining broad authority from federal regulators to assess the plane’s safety.
Richard Seeks, the lead plaintiff, said Boeing’s compromises began to emerge after the Ethiopian Airlines crash killed all 157 onboard, five months after the Lion Air crash killed 189.
Seeks said he bought 300 Boeing shares in early March, and sold them at a loss within the last two weeks. The lawsuit seeks damages for Boeing stock investors from Jan. 8 to March 21. ■