Boeing may avoid criminal charges over 737 MAX deal

The US Department of Justice is currently considering the possibility of allowing aerospace giant Boeing to avoid criminal prosecution for violating a 2021 agreement. This agreement was related to two fatal 737 MAX crashes that occurred in 2018 and 2019. The New York Times reported Friday, citing sources with knowledge of the case, that the Justice Department has not yet made up its mind and is considering various consequences, including the potential for a deferred prosecution agreement (DPA). A DPA would require Boeing to appoint a federal monitor to oversee improvements to safety protocols.

It was not possible for Boeing, which is traded on the NYSE as NYSE:BA, to comment immediately on the issue. Similarly, the Department of Justice declined to comment. It was not possible to independently verify the New York Times report by other sources at the time.

Boeing’s shares remained unchanged in the afternoon trading session on Friday. The company had previously faced accusations from the Ministry of Justice in May for failing to fulfill its obligations under the 2021 agreement designed to protect Boeing from criminal prosecution related to accidents. The agreement required Boeing to make significant improvements in its compliance and ethical operations. Despite the Justice Department’s arguments, Boeing maintained that it was adhering to the terms of the settlement.

Boeing agreed to pay $2.5 billion in January 2021 to resolve its criminal investigation into the crashes. The agreement included a stipulation that prosecutors would not pursue criminal charges against the company for fraud conspiracy charges related to the 737 MAX’s flawed design.

If the Justice Department chooses to pursue criminal charges, Boeing could face significant repercussions, including potential impacts on its ability to secure government contracts. This development follows a Reuters review of the consequences of companies violating similar agreements in the past.

Boeing has been struggling, especially since the Jan. 5 incident that resulted in the door plug of a 737 MAX 9 jet exploding, injuring several passengers. The company’s shares are down more than 30% this year.

Relatives of the 737 MAX crash victims criticize Boeing’s initial agreement with the Department of Justice, arguing that this agreement does not hold the company properly responsible. Recently, prosecutors have called on Boeing to fine Boeing nearly $25 billion and pursue criminal prosecution.

Reuters contributed to this article.

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