Al Root

Boeing looks to be on the verge of concluding one part of the painful recovery from two tragic 737 MAX crashes. Investors should be pleased, but they will remain focused on something else.

Over the weekend, the Justice Department released a status report, updating its criminal fraud case against Boeing. The update followed a Friday report from The Wall Street Journal that indicated the government wouldn't criminally prosecute the company or seek a guilty plea for charges relating to the MAX crashes in 2018 and 2019, which grounded that plane model worldwide between March 2019 and November 2020.

Boeing didn't immediately respond to a request for comment about the status report.

In 2021, Boeing entered into a deferred prosecution agreement to resolve criminal fraud charges relating to the crashes. The Justice Department contended that Boeing employees misled government regulators about the plane's design. That agreement, however, was voided in 2024, shortly after an emergency-door plug blew out of a 737 MAX 9 jet while in flight. The incident showed that Boeing had not taken "appropriate measures to encourage and support the observance of ethics and compliance policies and procedures against violation of U.S. fraud laws by personnel at all levels of the Company," according to the government.

The weekend update included new details of a new nonprosecution agreement, which include fines, expenditures on compliance improvements, "retention of an independent compliance consultant," and more compensation to the families of those killed in the two plane crashes.

Victims' families were informed of the potential agreement and can make written submissions to the government by Thursday, May 22, ahead of the May 27 pretrial deadlines. Investors can look for additional updates around both dates.

Additional fines look likely, but criminal prosecution might have resulted in fines or even jail time for some employees. Boeing has paid hundreds of millions in fines for both crashes and is committed to improving quality and design practices.

Boeing stock fell 0.2% on Friday, following the Journal's report. Shares were down 2.3% in premarket trading on Monday at $201, while S&P 500 and Dow Jones Industrial Average futures were down 1.1% and 0.7%, respectively.

The futures dip and Boeing stock's decline were most likely related to Moody's Friday evening downgrade of U.S. government debt from AAA to Aa1. Coming into Monday trading, Boeing stock was up about 12% so far in May, and up about 16% year to date.

Write to Al Root at allen.root@dowjones.com

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May 19, 2025 07:45 ET (11:45 GMT)

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