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Boeing to plead guilty to criminal fraud charge stemming from 737 MAX crashes

cnbc.com

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Re: Boeing to plead guilty to criminal fraud charge stemming from 737 MAX crashes

#311

Post by gruez »

heymijo wrote: post #207

Regarding the "Can/should a CEO or officer be held liable?" dialogue, there is already at least one precedent. The 2002 Sarbanes-Oxley (SOX) Act: > The law states that if top corporate executives knowingly sign off on a false financial report, they’re subject to a prison term of up to 10 years and a fine of up to $1 million, with penalties escalating to 20 years and $5 million if their misconduct is willful. [0] Now,…

1. sounds like a variant of "everything is securities fraud"[1], where you can't prosecute someone for [bad thing] so you prosecute them for lying about [bad thing], where [bad thing] could be anything between causing global warming to getting hacked.

2. It's highly unlikely they'll ever get anywhere near the maximum[2].

[1] https://archive.is/p2YHV

[2] https://web.archive.org/web/20130208124604/https://www.popeh...

Re: Boeing to plead guilty to criminal fraud charge stemming from 737 MAX crashes

#312

Post by xnorswap »

hdesh wrote: post #4

I wonder if the outcome would have been any different if the 737 MAX crashes had happened on the American soil and involved loss of American lives.

Look at how the story had all but disappeared until there was a non-fatal incident that happened to a US airline. Everyone across the media and anyone from regulators to legislators sprung into action focusing their attention and making demands of accountability.

I have zero doubt that had the door-plug came off the plane on a non-US airline, that excuses would have been made, the usual insinuations about poor quality maintenance, and issues would still be brushed under the carpet.

Likewise, had the first crash been a US airline, I'm sure there would have been an immediate grounding.

Instead, after the second crash on March 10:

> On March 11, the FAA defended the MAX against groundings by issuing a Continued Airworthiness Notice to operators.

Re: Boeing to plead guilty to criminal fraud charge stemming from 737 MAX crashes

#313

Post by azinman2 »

supernova87a wrote: post #25

Our governmental methods of punishment for corporations strike me as lacking. This seems similar to Wells Fargo, where ok, the company was fined, sued, made to pay restitution (somewhat) to victims. But underlying it all, the culture and incentives at the company that produced the situation didn't get fundamentally changed. Which often perpetuates across specific leaders, boards, and is a part of what a company is --…

Basically jail need to be much more common, and/or these fines come directly from a CEO personally. Then you’ll see change.

Re: Boeing to plead guilty to criminal fraud charge stemming from 737 MAX crashes

#314

Post by gruez »

BartjeD wrote: post #124
justinclift wrote: post #31

Seems an extremely soft ball approach: • Under the deal, Boeing agreed to pay a $243.6 million fine and for an third-party monitor to be installed to monitor the company’s compliance. ~$240M seems pretty low for an industry where billions are commonly thrown about. • The deal spares Boeing from a trial just as the planemaker is trying to turn a corner in its safety and manufacturing crises. Sparing them from a trial…

For spilling a hot coffee cup you get $ 2.7 million worth of punitive damages. But for killing more than 200 people and trying to hide the evidence, we'll charge you 200 million and call it a day. That's less per person than the price of a hot-coffee spill.

>For spilling a hot coffee cup you get $ 2.7 million worth of punitive damages

Unless you're talking about a different case the actual amount was way less than that.

>The trial judge reduced the punitive damages to three times the amount of the compensatory damages, totalling $640,000. The parties settled for a confidential amount before an appeal was decided.

https://en.wikipedia.org/wiki/Liebeck_v._McDonald%27s_Restau...

More to the point, it's the difference between a jury trial where jurors are likely to award high amounts from a unsympathetic defendant (a big faceless multinational) to a sympathetic plaintiff (79 year old women), and a settlement (presumably the government didn't think they had a strong case so they didn't take to trial).

Re: Boeing to plead guilty to criminal fraud charge stemming from 737 MAX crashes

#315

Post by semiquaver »

Joel_Mckay wrote: post #307
heymijo wrote: post #207

Regarding the "Can/should a CEO or officer be held liable?" dialogue, there is already at least one precedent. The 2002 Sarbanes-Oxley (SOX) Act: > The law states that if top corporate executives knowingly sign off on a false financial report, they’re subject to a prison term of up to 10 years and a fine of up to $1 million, with penalties escalating to 20 years and $5 million if their misconduct is willful. [0] Now,…

Actually in most places, technically as president/CEO of a firm you are already liable for any criminal conduct by your firm/employees-on-the-job. The corporate lawyers should have clearly warned them about this already. Additionally, any criminal lawyer should have warned Boeing people it is often around a 10 year jail term for criminal negligence. Unless the president/CEO can prove they enforced policy to mitigate…

  > technically as president/CEO of a firm you are already liable for any criminal conduct by your firm/employees-on-the-job.
Citation needed. Limited liability is at the foundation of the very concept of incorporation.

Re: Boeing to plead guilty to criminal fraud charge stemming from 737 MAX crashes

#316

Post by zdw »

bluGill wrote: post #261
tremon wrote: post #199

Earlier quoted context omitted.

Prime counterexample: Sarbanes-Oxley. Yes, you can punish people for failing to comply with legal obligations, even if they had no specific knowledge of the obligation not being met.

Ignorance of the law has never been an excuse. You are expected to know all the laws that apply to you.

The law being so wide ranging, complicated, and subject to interpretation based on previous decisions (in may jurisdictions) it's practically impossible to know definitively every law that applies to you, even for an expert.

Now, knowing what the law is in specific, narrow areas that you're operating in, or with sufficient budget to hire experts, that's something different, and might be closer to knowable.

Re: Boeing to plead guilty to criminal fraud charge stemming from 737 MAX crashes

#317

Post by mihaic »

fwip wrote: post #282
mihaic wrote: post #269

Earlier quoted context omitted.

What about a crime that was in their job description to have knowledge of? Would a doctor not be liable if he didn't properly diagnose a patient? There is an assumption of minimal professional competency when you assume the responsibility of that role.

Doctors are definitely not liable for misdiagnoses.

I'm pretty sure that you can sue for malpractice should the misdiagnosis fall below a minimum standard of conduct. In practice, misdiagnosis is not easy to prove, but we're talking Boeing executive level of incompetence here.

Re: Boeing to plead guilty to criminal fraud charge stemming from 737 MAX crashes

#318

Post by brianwawok »

semiquaver wrote: post #315
Joel_Mckay wrote: post #307

Earlier quoted context omitted.

Actually in most places, technically as president/CEO of a firm you are already liable for any criminal conduct by your firm/employees-on-the-job. The corporate lawyers should have clearly warned them about this already. Additionally, any criminal lawyer should have warned Boeing people it is often around a 10 year jail term for criminal negligence. Unless the president/CEO can prove they enforced policy to mitigate…

> technically as president/CEO of a firm you are already liable for any criminal conduct by your firm/employees-on-the-job. Citation needed. Limited liability is at the foundation of the very concept of incorporation.

Isn’t LL about protecting your assets not you from jail time? I can’t start a LLC, have the LLC pay someone to kill you, and be scott free. “Sorry you can’t go after me, go after this shell company and try to put it in jail ha ha”

Re: Boeing to plead guilty to criminal fraud charge stemming from 737 MAX crashes

#319

Post by AndrewKemendo »

davedx wrote: post #59
constantcrying wrote: post #36

Earlier quoted context omitted.

The problem is that finding the people responsible can be extremely hard, so you have to go against the corporation itself. Punishing a corporation is easy, but the government hates doing it for obvious reasons. It means ruining something which is useful to you and punishing tens of thousands of completely innocent people, with inevitable layoffs. What Boeing really needs is a complete change in management culture, a…

> The problem is that finding the people responsible can be extremely hard > What Boeing really needs is a complete change in management culture Who is ultimately responsible for management at a company though? The CEO and the other C-level people. This isn't really the daunting difficult problem you make it out to be: the buck stops at the C-suite. Who else could possibly be ultimately responsible??

Boards run corporations on behalf of investors through vague and soft guidance so as not to directly be considered officers

CEOs are appointed based on their ability to do what the board wants while shielding the board - this is why they get paid the most

Until investors and the board significantly hurt, to the point where their investment is either a total loss, or they are liable for additional financial inputs then nothing will change

Re: Boeing to plead guilty to criminal fraud charge stemming from 737 MAX crashes

#320

Post by snewman »

constantcrying wrote: post #36
supernova87a wrote: post #25

Our governmental methods of punishment for corporations strike me as lacking. This seems similar to Wells Fargo, where ok, the company was fined, sued, made to pay restitution (somewhat) to victims. But underlying it all, the culture and incentives at the company that produced the situation didn't get fundamentally changed. Which often perpetuates across specific leaders, boards, and is a part of what a company is --…

The problem is that finding the people responsible can be extremely hard, so you have to go against the corporation itself. Punishing a corporation is easy, but the government hates doing it for obvious reasons. It means ruining something which is useful to you and punishing tens of thousands of completely innocent people, with inevitable layoffs. What Boeing really needs is a complete change in management culture, a…

> What Boeing really needs is a complete change in management culture, as that was the real root cause for the MAX disasters, but that is impossible to enforce, you can't even really verify that it has happened.

Serious question: why not? Why couldn't we require Boeing to change its culture, and then verify and enforce that change? Verification might involve periodically interviewing employees across all levels of the organization, performing spot checks and audits to make sure that procedures are being followed (no more failing to enter a work item into the system), and so forth.

(I don't mean to imply that this would be feasible under current regulatory law – I have no idea whether that is the case or not. I'm just saying that you could imagine a world where this could be done.)

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