The stock of Boeing (BA) is slumping on media reports that the commercial aircraft manufacturer is facing new legal challenges.
Specifically, the U.S. Justice Department has said that Boeing has violated the terms of a 2021 agreement that had resolved criminal conspiracy charges related to two 737 MAX airplane crashes.
The Justice Department claims expose Boeing to potentially new criminal charges and litigation by the U.S. government.
The previous 737 MAX crashes were linked to faulty flight control software. All MAX aircraft were grounded between March 2019 and November 2020 while Boeing fixed the problem.
The company paid a fine of $2.5 billion U.S. to the government and committed to strengthening and enhancing its compliance program.
The settlement and its terms had shielded Boeing from potential criminal prosecution and additional fines.
But now, the Justice Department claims that Boeing has violated the terms of its previous settlement, exposing the company to new litigation.
The Justic Department claims come after a door plug blew off a 737 MAX 9 aircraft being operated by Alaska Air on January 5 of this year.
“We believe that we have honored the terms of that agreement and look forward to the opportunity to respond to the Department on this issue,” said Boeing in a statement.
Since the Alaska Air incident earlier this year, Boeing has agreed to slow production amid more scrutiny from regulators.
Consequently, Boeing’s stock has declined nearly 30% so far in 2024 to trade at $180.76 U.S. per share.
The stock of Boeing is down a further 1% on news of the U.S. Justice Department’s claim.
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