A class-action lawsuit was filed against Boeing by shareholders who claim they were defrauded by the airline manufacturer after two of its 737 MAX planes crashed.
The lawsuit was filed Tuesday in the U.S. District Court, Northern District of Illinois by lead plaintiff Richard Seeks. He filed his intention to seek a class-action status against Boeing after the crashes of Lion Air Flight 610 last year and Ethiopian Airlines Flight 302 last month, alleging that Boeing defrauded shareholders by not disclosing lapses in safety in its 737 MAX planes, two of which were involved in fatal crashes in the past several months.
Boeing’s negligence resulted in securities fraud violations, according to the complaint, after the company’s market value plummeted by $34 billion within two weeks of the Ethiopian Airlines fatal crash.
Countries around the world grounded the Boeing 737 MAX airliner within a week of the Ethiopia Airlines crash.
An investigation by Ethiopian and international aviation officials concluded the Ethiopia Airlines flight crew did every maneuver according to protocols set by both international aviation standards and the Boeing company. Ethiopian Minister of Transportation Dagmawit Moges said last week that at no point after the initial nose-dive was the crew “able to control the aircraft.”
The Ethiopian Airlines Aviation Group, who is the parent company of Ethiopia Airlines, said the preliminary results from the investigation shows the airline followed all proper procedures and the airline is not at fault in any way for the crash.
The crashes, which showed faults in the plane’s Maneuvering Characteristics Augmentation System, led the Federal Aviation Administration to follow its international counterparts in grounding Boeing’s 737 MAX fleet. Boeing said it has been working with the FAA and its customers on a software update to prevent future accidents.
Boeing is repairing a second software problem on its grounded 737 MAX airliners while working on a patch for an anti-stall system linked to the crash of two of its planes.
The class-action lawsuit filing said Boeing “effectively put profitability and growth ahead of airplane safety and honesty” by not disclosing safety deficiencies, instead caring more about the race to compete against Airbus and pushing the 737 MAX planes onto the market. That rush resulted in Boeing leaving out “extra” or “optional” features designed to prevent the fatal crashes, the lawsuit alleges.
