Active Stocks
Fri May 24 2024 15:59:27
  1. Tata Steel share price
  2. 174.80 -0.37%
  1. NTPC share price
  2. 374.85 0.68%
  1. State Bank Of India share price
  2. 828.60 -0.45%
  1. ITC share price
  2. 436.10 -1.16%
  1. Power Grid Corporation Of India share price
  2. 318.50 -0.39%
Business News/ News / Boeing Breached Prosecution Deal, Justice Department Finds
BackBack

Boeing Breached Prosecution Deal, Justice Department Finds

Boeing Co. has violated a deferred prosecution agreement with the Justice Department related to the crashes of two 737 Max airplanes, the department said in a court filing.

Boeing Breached Prosecution Deal, Justice Department FindsPremium
Boeing Breached Prosecution Deal, Justice Department Finds

(Bloomberg) -- Boeing Co. has violated a deferred prosecution agreement with the Justice Department related to the crashes of two 737 Max airplanes, the department said in a court filing.

“The government has determined that Boeing breached its obligations under DPA," according to the filing posted Tuesday.

Boeing breached it “by failing to design, implement, and enforce a compliance and ethics program to prevent and detect violations of the U.S. fraud laws throughout its operations," according to the filing.

The Justice Department said it is still determining how to proceed, including whether and how to punish the company. The department has directed Boeing to respond by June 13 with its analysis and comments, which will be taken into consideration with regard to any punishment.

Boeing didn’t immediately comment on the finding.

The decision escalates the legal risks facing the planemaker in the wake of a near-catastrophe in early January when a fuselage panel blew off a 737 Max during flight.

Under the agreement, Boeing admitted to misleading its regulator, the Federal Aviation Administration, about changes made to its new jet, the 737 Max, and paid a criminal fine of $243 million. If the company cooperated fully with the government over a period of three years, prosecutors would move to get a fraud charge against the company dropped. Just before the three-year period expired, a Boeing door plug blew off an Alaska Airlines plane mid-flight, forcing pilots to turn around and land. The Justice Department opened a criminal investigation.

US prosecutors in Seattle have already sent subpoenas seeking documents and communications from Boeing and supplier Spirit AeroSystems Holdings Inc., which made the door plug. The US Securities and Exchange Commission is also scrutinizing Boeing’s comments about its safety practices after the Jan. 5 accident.

Boeing took steps to improve safety following the two 737 Max crashes in 2018 and 2019, including creating a chief aerospace safety officer and changing the management structure so its engineers reported to chief engineer Howard McKenzie rather than business leaders. But the measures didn’t go nearly far enough, according to scathing report issued by the Federal Aviation Administration in February.

The year-long study found that many Boeing employees didn’t know how to flag potential safety issues and didn’t trust the “Speak Up" program the company put in place to flag wrongdoing. The planemaker was also faulted for ineffective procedures and training.

(Updates with background on deferred prosecution agreement)

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

You are on Mint! India's #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 15 May 2024, 04:42 AM IST
Next Story footLogo
Recommended For You