According to the complaint, Boeing, together with its subsidiaries, is one of the world’s major aerospace firms. It is organized based on the products and services it offers and operates in four reportable segments: (a) Commercial Airplanes (“BCA”); (b) Defense, Space & Security; (c) Global Services; and (d) Boeing Capital. The BCA segment develops, produces and markets commercial jet aircraft and provides fleet support services, principally to the commercial airline industry worldwide. This segment is a leading producer of commercial aircraft and offers a family of jetliners purportedly designed to meet a broad spectrum of global passenger and cargo requirements of airlines. On October 29, 2018, shortly after takeoff, Lion Air Flight 610 crashed, killing all aboard. Then, on March 10, 2019, shortly after takeoff, Ethiopian Airlines Flight 302 crashed, killing all aboard. The airplanes that crashed were Boeing 737 MAX jets.
The Class Period commences on January 8, 2019, when the defendants issued a press release entitled, “Boeing Sets New Airplane Delivery Records, Expands Order Backlog, Delivered 806 commercial jets in 2018 with record-setting fourth quarter, Won nearly 900 net orders valued at $143.7 billion after finalizing more than 200 orders in December, 737 MAX family surpassed 5,000 orders; 777 family exceeded 2,000 orders.”
The complaint alleges that, following the crash of Ethiopian Airlines Flight 302, on March 11, 2019 Ethiopian Airlines grounded its 737 MAX 8. Similarly, the China Civil Aviation Administration grounded the 737 MAX 8. Following this news, the price of Boeing shares fell $47.13 per share, or 11.2%, during the two trading days ended March 12, 2019.
Since then, the 737 MAX series aircraft has been grounded by every country and no longer permitted to fly. In addition, the U.S. Department of Transportation Office of Inspector General, the U.S. Department of Justice, and the FBI reportedly opened investigations into the Federal Aviation Administration (“FAA”) certification process and into safety-review processes.
On March 21, 2019, The New York Times reported in an article entitled, “Doomed Boeing Jets Lacked 2 Safety Features That Company Sold Only as Extras”, that Boeing has hidden from investors, pilots and passengers, that because of the safety compromised, Boeing created two new safety features that it sold as “extras” or “optional features” to keep costs down. Following this news, the price of Boeing shares fell $10.53 per share, or about 3%, on March 22, 2019.
The complaint alleges that throughout the Class Period, the defendants misled investors about the sustainability of Boeing’s core operation – the BCA – by touting its growth prospects and profitability, raising guidance, and maintaining that the Boeing 737 MAX was the safest airplane to fly the skies. Boeing made these statements all while concealing the full extent of safety problems caused by the placement of larger engines on the 737 MAX that changed the handling characteristics of the 737 MAX from previous models. The complaint further alleges that Boeing hid from investors and passengers that it prepared its own reports and statements to the FAA certifying its planes as safe to fly and that these statements and reports were undermined by Boeing’s conflicts of interest in having been delegated authority by the FAA to examine, test, and help certify its own planes and to provide the safety analysis for the 737 MAX. Boeing also hid the fact that Boeing withheld necessary safety features from the Boeing 737 MAX unless airlines purchased them as “extras” or “optional features” in order to keep the price down.
If you are a member of the class described above, you may no later than June 10, 2019 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
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