SEC probing Boeing’s safety claims following Alaska Airlines incident

The US Securities and Exchange Commission is scrutinizing statements that Boeing Co. made about its safety practices following a near-tragic January accident aboard one of its 737 Max 9 planes.

The SEC investigation is focused on whether comments by the company or its executives misled investors in violation of the Wall Street regulator’s rules, according to three people with knowledge of the probe. The probe is examining statements before and after a panel blew off during an Alaska Airlines flight shortly after takeoff on Jan. 5., leaving a gaping hole in the side of the plane, said the people, who asked not to be identified discussing the confidential investigation.

SEC reviews don’t always lead to enforcement actions by the regulator, but they can lead to fines for companies or corporate officials if the agency finds they made false or misleading statements. The regulator hasn’t accused the company or its officials of wrongdoing.

The SEC and Boeing declined to comment.

The probe adds to legal headaches for Boeing, whose stock has lost about one third of its value in 2024. US prosecutors in Seattle have already sent subpoenas seeking documents and communications from Boeing and Spirit AeroSystems Holdings Inc., which made the door plug. The supplier said earlier this week it had received information requests from the SEC. 

The January flight, which was carrying 171 passengers and six crew members, was forced to return to Portland, Oregon, after the door plug suddenly blew out. Although no one was seriously injured, it left the plane significantly damaged.

The accident has added to broader concerns about Boeing’s manufacturing process and about its safety culture.

The National Transportation Safety Board has said the panel was missing four bolts to hold it in place when it left Boeing’s factory. That’s sparked an Federal Aviation Administration investigation of quality controls in Boeing’s factories and suppliers like Spirit AeroSystems.

In September 2022, Boeing agreed to pay $200 million to settle SEC allegations that the company and its former Chief Executive Officer Dennis Muilenburg failed to disclose safety issues with its 737 Max jetliner, which was involved in fatal crashes in 2018 and 2019. Following the January accident, the Justice Department is weighing whether to rip up a deal it made with Boeing to settle over those two tragedies.