As the world's best investment manager and financial market journalist, I bring you the latest update on Boeing's legal troubles. U.S. District Judge Reed O'Connor has scheduled a hearing on October 11 to address objections from relatives of the victims of two Boeing 737 MAX crashes. The planemaker has agreed to plead guilty to criminal fraud conspiracy and pay up to $487 million after violating a deferred prosecution agreement.
Family members of the 346 people who lost their lives in the tragic crashes argue that the fine is too low and have raised other concerns about the plea deal. Polish national airline LOT has also filed objections, claiming damages of at least $250 million related to the 14 737 MAX aircraft it owned and leased at the time of the grounding in 2019.
Boeing and the Justice Department have not commented on Judge O'Connor's announcement yet. The Justice Department has described the plea deal as a significant resolution that holds Boeing accountable and serves the public interest.
According to court documents, Boeing allowed risky practices at its factories and failed to maintain accurate airplane records, leading to the violations of the deferred prosecution agreement. The company will be required to spend $455 million on enhancing compliance, safety, and quality programs over three years of probation. Additionally, an independent monitor will oversee Boeing's operations for the next three years.
Judge O'Connor may also order Boeing to pay restitution to victims' families, in addition to the compensation they have already received. This case has been described as one of the deadliest corporate crimes in U.S. history, highlighting the importance of holding companies accountable for their actions.
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