The company’s market value has plunged since an Ethiopian Airlines jet crashed shortly after takeoff on March 10, killing all 157 on board. The crash was the second in five months involving the same Boeing model. On Oct. 29, Lion Air Flight 610 went down off Indonesia, killing all 189 passengers and crew members.
Investigators have zeroed in on a new automated anti-stall system known as MCAS as the possible cause of both incidents. A preliminary report on the Ethiopian Airlines crash indicated that pilots struggled to control the MCAS before the crash.
Last week, Boeing chief executive Dennis Muilenburg said it was “apparent” that MCAS had been activated in both crashes after sensors fed the system erroneous information.
The lawsuit is one in a growing list of challenges for the Chicago-based company. Several lawsuits have been brought by victims’ families that allege that the company did not inform pilots about the dangers of MCAS and that it was negligent. The company recently said it would decrease production of the 737 Max from 52 aircraft per month to 42. Meanwhile, aviation officials worldwide have kept the aircraft grounded.
Boeing did not immediately respond to a request for comment.
Seeks, of LaCrosse, Wis., claims that Boeing’s “false and misleading statements” about the company’s operations, its growth and its safety record inflated its market value. “Boeing, and the passenger airlines, 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” to compete with Airbus, the lawsuit states.
Seeks said he bought 300 Boeing shares in early March and sold them weeks later at a more than $14,000 loss. The company itself has shed about $30 billion, or 12.7 percent, in market value since the Ethiopia crash.
The lawsuit, which also names Muilenburg and chief financial officer Gregory Smith. seeks damages on behalf of investors who purchased Boeing shares from Jan. 8 to March 21, plus interest, and legal fees.
Seeks’s attorneys did not immediately respond to a request for comment. The lawsuit was filed in the U.S. District Court for the Northern District of Illinois.
Boeing is one of the country’s top manufacturers and counts more than 153,000 in its U.S. workforce. It earned a record $101.1 billion in 2018 — 13 percent better than the year before — amid an intense battle with its chief rival, Airbus.