Boeing shareholders sue over 737 MAX debacle

The temperature is rising within Boeing as a new lawsuit accuses the company of defrauding shareholders by masking safety deficiencies in the 737 MAX, leading to two fatal crashes within six months and an ongoing worldwide grounding of the type.

Citing Reuters, the proposed class action filed in Chicago federal court seeks damages for alleged securities fraud violations, after $34 billion was eliminated from Boeing’s market value within two weeks of the most recent 737 MAX crash being Ethiopian Airlines flight 302, leaving 157 passengers and crew deceased.

The complaint states Boeing “effectively put profitability and growth ahead of airplane safety and honesty” by rushing the 737 MAX to market to compete with Airbus, while leaving out “extra” or “optional” features designed to prevent the Ethiopian Airlines and Lion Air crashes.

Ethiopian Airlines Boeing 737 MAX involved in fatal crash

Ethiopian Airlines Boeing 737 MAX

Additionally, it covers the contributing factor of Boeing and the FAA potentially not following the correct chain of command via experience to certify an aircraft.

The lead plaintiff, Richard Seeks, began to seek action shortly after the crash of ET302. After purchasing 300 Boeing shares in March and selling them at a loss, the next step was to take action. The lawsuit applies to stock investors between the dates January 8 and March 21.

This development adds to the ongoing bombardment from media and other investigative authorities, including the FBI and the Department of Justice, who are conducting a criminal investigation on the company, which you can read about here:

FBI to join Boeing 737 MAX criminal investigation