Aerospace giant Boeing Co. is reportedly facing a probe by the U.S. Securities and Exchange Commission concerning whether the company properly disclosed issues related to its 737 Max airplanes.
Citing people familiar with the matter, Bloomberg reported that officials in the SEC's enforcement division are investigating whether the Chicago-based plane-maker was adequately forthcoming with shareholders about "material problems with the plane."
Investigators are also looking at Boeing's financial statements to make sure they sufficiently reflected the possibility of effects from the 737 Max issues.
The SEC and Boeing declined to comment on the report.
An SEC probe would only be the latest of Boeing's growing problems related to its 737 Max airplanes after two deadly crashes. The company is facing congressional and federal investigations, as well as a criminal probe. And families of victims who were killed in the crashes have filed lawsuits.
"They haven't engendered a lot of trust out there," said John Jacobs, executive director at Georgetown University's Center for Financial Markets and Policy. "They're going to be very engaged in fighting this for many years to come."
Legal experts have said civil lawsuits brought by crash victims' families will have strong claims for damages. In addition, Boeing could face product liability related to supposed plane defects, and negligence allegations claiming that the company did not adequately train pilots and did not take steps to fix problems after the first crash.
The first crash occurred in October when a Lion Air flight plunged into the Java Sea shortly after takeoff. Less than six months later, an Ethiopian Airlines flight crashed minutes after takeoff. Together, the two crashes killed 346 people, leaving no survivors.
Investigators have implicated the planes' flight control software, known as Maneuvering Characteristics Augmentation System. The software was intended to prevent stalls by pushing the plane's nose down.
Boeing intends to issue an update to the software, which still needs a sign-off from the Federal Aviation Administration. On Friday, acting FAA Administrator Daniel Elwell refused to commit to a timetable for a resumption of service.
Information for this article was contributed by staff members of the Financial Times.
Business on 05/25/2019