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Shareholders have initiated a lawsuit against Boeing, claiming the company concealed serious safety issues.
The lawsuit, filed this Tuesday in the US District for the Eastern District of Virginia, follows an incident last month where a Boeing 737 Max 9 experienced a midair door failure during an Alaska Airlines flight, raising questions about Boeing’s commitment to safety and quality control.
The class action, led by Rhode Island Attorney General James Diossa, accuses Boeing of undermining investor trust by allegedly prioritizing profits over safety, resulting in compromised quality control of its aircraft, specifically the 737 MAX. The lawsuit represents all individuals and entities who acquired Boeing’s common stock between October 23, 2019, and January 24, 2024. It points to Boeing’s claims of progress toward safely returning the 737 MAX to service after two fatal crashes in 2018 as misleading, given undisclosed risks of manufacturing defects.
The incident in question, which forced an emergency landing due to a significant structural failure, led to a noticeable dip in Boeing’s stock market value following the FAA’s decision to ground the 737 Max 9 fleet in the US. This lawsuit argues that the plaintiffs incurred considerable financial losses as a result. Additionally, Boeing faces lawsuits from passengers over the emotional and physical distress caused by the incident.
This comes as the FAA’s subsequent investigation into Boeing’s compliance with safety regulations and the audit of the 737 Max 9 production line. The agency has mandated a comprehensive inspection and maintenance regimen for the grounded aircraft, a process that has already facilitated the return of some jets to service.