Boeing’s legal troubles grew Tuesday as a new lawsuit has been filed against the company. It accuses Boeing of defrauding shareholders by concealing safety deficiencies in its 737 MAX planes before two fatal crashes led to their worldwide grounding. 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.
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.
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. He says 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.
These lawsuits are common when companies are accused of securities fraud for concealing material negative information that causes the stock price to decline when they finally become public. This is just the latest lawsuit to hit Boeings over the two crashes. Victims’ families and participants in its employee retirement plans have filed lawsuits against the company already.
Read more at Reuters