A class-action lawsuit has been filed in federal court against the Boeing Co. by participants of the company's Voluntary Investment Plan and on behalf of all defined contribution plans sponsored by Boeing for violating the Employee Retirement Income Security Act.
The lawsuit, filed March 31 in U.S. District Court in Chicago, alleges that defendants failed to protect its DC plans and their participants. Specifically, it says Boeing failed to publicly disclose safety problems with its 737 MAX aircraft even as plan participants purchased and held Boeing shares at an inflated price in their retirement savings accounts, according to the lawsuit.
The suit alleges that Boeing knew for years that its 737 MAX aircraft had major safety problems yet failed to publicly disclose them. After a 737 MAX crashed in Indonesia in October, Boeing still failed to publicly disclose the problems inherent to the aircraft, which led to Boeing's stock price being artificially inflated, the suit said.
After the second 737 MAX crash in Ethiopia last month, the public became aware that Boeing had concealed certain safety issues, prompting Boeing's share price to drop to $375.41 on March 12 from $442.54 on March 8.
The lawsuit argues that the defendants knew that Boeing's stock price was artificially inflated and knew that many plan participants allocated significant portions of their retirement savings to Boeing stock and made additional purchases of Boeing stock for their retirement savings accounts.
"Boeing's reputation has been seriously damaged by its concealment of the safety problems with the 737 MAX, and that reputational harm has been felt by Boeing's shareholders, including plaintiffs and the other plan participants who included Boeing shares in their retirement savings," the suit alleges.
The plaintiffs are looking to settle this suit through a trial by jury.
Boeing had $64 billion in total DC assets as of Sept. 30, according to Pensions & Investments data. The plans had 16.8% of assets invested in Boeing stock as of Dec. 31, 2017, according to its most recent 11-K filing.
Boeing spokesman Charles Bickers declined to comment.
