(Reuters) – Boeing Co.'s legal problems grew on Tuesday as a new trial accusing the company of deceiving shareholders by hiding security flaws in their 737 MAX plans before two lethal crashes led to its worldwide foundation.
Proposed complaints filed in Chicago federal courts are seeking damages for alleged securities fraud, after Boeing's market value stumbled upon $ 34 billion within two weeks of the crash of an Ethiopian Airlines 737 MAX on March 10.
CEO Dennis Muilenburg and CFO
Boeing spokesman Charles Bickers had no immediate comment.
According to the complaint, Boeing puts "effective profitability and growth ahead of flight safety and honesty" by rushing 737 MAX to the market to compete with Airbus SE, while providing "extra" or "optional" features designed to prevent Ethiopian Airlines and Lion Air crash.
I t also said Boeing's statements about their growth prospects and 737 MAX are undermined by their alleged conflict of interest from retaining broad authority from federal regulators to assess aviation security.
Richard Seeks, chief applicant, said that Boeing's compromises began to emerge after the Ethiopian Airlines crash killed all 1
Seeks said he bought 300 Boeing shares in early March and sold them with loss over the past two weeks. The lawsuit seeks damages for Boeing's equity investors from January 8 to March 21, 2019.
Shareholders often make lawsuits that accuse companies of securities fraud in order to conceal significant negative information that may cause the share price to decline after becoming public.
Chicago-based Boeing is facing many other trials over the crashes, including the victims 'families and participants in their employees' retirement plans.
Boeing said on Tuesday that the aircraft's orders in the first quarter fell to 95 from 180 a year earlier, without ordering 737 MAX after the global grounding.
On April 5, it said it planned to cut 737 production to 42 planes from 52 and made progress on a 737 MAX software update to prevent further accidents.
The case is Seeks v. Boeing Co. et al US District Court, Northern District of Illinois, No. 19-02394.