Boeing Co. agreed to pay $200 million to settle a Securities and Exchange Commission investigation into allegations that the plane maker and its former chief executive made misleading statements about the 737 MAXs safety risks after two of the jets crashed. Dennis Muilenburg, Boeings former CEO, agreed to pay $1 million to settle the SECs claims, the agency said on Thursday. Both the company and Mr. Muilenburg resolved the investigation without admitting or denying wrongdoing. In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair and truthful disclosures to the markets, SEC Chairman Gary Gensler said. He said Boeing and Mr. Muilenburg failed in this most basic obligation. Boeing said it has made changes across the company in response to the 737 MAX crashes, including improving its safety processes and transparency.

Mr. Muilenburg didnt respond to requests for comment. The Wall Street Journal reported earlier Thursday that Boeing was poised to settle the matter with the SEC. Accident investigators have blamed an automated flight-control system for sending two Boeing 737 MAX jets into fatal nosedives in late 2018 and early 2019. Mr. Muilenburg led Boeing through the two crashes, which took 346 lives, and months of their aftermath. His predictions about when the 737 MAX would return to service frustrated the companys airline customers and senior leaders at the Federal Aviation Administration, which had grounded the plane after the second crash, in Ethiopia, in March 2019. The SEC enforces laws that require public companies like Boeing to disclose material facts and other information that shareholders need to make investment decisions. The agency investigated how Boeing communicated with investors about the crashes and its response to the crisis, which wiped out billions of dollars of the companys market value. The SEC said Thursday that Boeing and Mr. Muilenburg made misleading statements about the crash and the 737 MAX in November 2018, after the first crash, and then again in April 2019, after the second tragedy. In the first instance, in November 2018, Boeing issued a press release that played down elements of a preliminary accident report from the first crash and assured the public that the 737 MAX is as safe as any airplane that has ever flown the skies, according to the SEC settlement order. By that point, however, an internal company safety review board had determined the flight-control system posed a risk that needed to be fixed, the SEC said. The companys press release made no mention of the safety issue, the order said. The agency also said Mr. Muilenburg suggested removing references to planned changes to the automated system known as MCAS from the release.

In the second case, according to the SEC, Mr. Muilenburg told investors and journalists after the April 2019 crash that there was no surprise or gap or unknown that slipped through the 737 MAXs certification process. That remark was misleading, the SEC said, because Boeing had already uncovered key facts about the flight-control system that werent disclosed to certain FAA officials, according to the order. An internal Boeing compliance review had separately identified documentation gaps and inconsistencies relating to MCAS and the certification process, the SEC said. The agency said that Mr. Muilenburg had been briefed on the core findings of the internal compliance review, but those facts werent disclosed when he made the April 2019 statements. Investors who purchased debt securities from Boeing in the months after the crashes should have been aware of those risks and facts, the SEC said. The Justice Department conducted a separate criminal investigation that alleged a former Boeing pilot misled air-safety regulators about how the MAXs flight- control system worked. Boeing paid $2.5 billionmost of that earmarked for airline customers and families of the crash victimsto settle the DOJs criminal probe. After the first 737 MAX crashed in Indonesia in October 2018, Mr. Muilenburg touted the airplanes safety as regulators around the world continued to allow airlines to carry passengers on the aircraft. The 737 MAX is a very safe airplane and were very confident, Mr. Muilenburg told Fox Business Network on Nov. 13, 2018. Mr. Muilenburgs assurances followed a Wall Street Journal article that revealed Boeing hadnt informed pilots about the MCAS system on the 737 MAX, which accident investigators had identified as playing a significant role in the crashes. On Nov. 20, 2018, Muilenburg expressed disappointment in Boeings response to the negative postcrash media coverage, according to the SEC. According to the agency, Mr. Muilenburg said in an email: [w]e are spending too much time playing defense...[we] need to start playing some offense. While Boeings engineers were working on a fix to MCAS, the company was publicly pointing to apparent pilot and airline-maintenance missteps that investigators also flagged as factors leading to the accidents. Air-safety regulators in the U.S. and around the world allowed the 737 MAX to keep flying as safety bulletins reminded pilots of emergency procedures that could disable the flight- control system if it misfired. Regulators grounded the plane after the second crash in March 2019. The DOJs criminal investigation led to charges against a former Boeing pilot, Mark Forkner, who was accused of misleading federal air-safety regulators about

MCAS and whether the systems details should be included in pilot manuals and training. Prosecutors alleged Mr. Forkner misled regulators to save Boeing hundreds of millions of dollars. After a trial in Fort Worth, Texas, that lasted less than a week, he was acquitted in March of all charges against him. No Boeing executives faced criminal prosecution for their roles in the 737 MAX crashes or its certification. The companys settlement agreement with the Justice Department said prosecutors didnt find pervasive misconduct involving high-level company officials. In a January 2020 securities filing, Boeing said Mr. Muilenburg was set to receive more than $60 million in compensation following his departure from the company. Later that year, U.S. air-safety regulators approved various changes to the 737 MAXs flight-control system and allowed it to resume passenger service. Boeing in 2021 generated $62.3 billion in total sales.

Answer the questions (150 words max each question)

1. Of all the actions or inactions mentioned in the article, which do you find the most ethically troubling and why?

2. What are some organizational structures and/or corporate rules and procedures that Boeing could have had in place that would have significantly minimized the problems it encountered with the development and production of the 737 MAX?