The US Department of Justice (DOJ) said on Tuesday that Boeing (NYSE:) violated its obligations under a 2021 agreement that shielded the company from criminal prosecution in connection with the deadly 737 MAX crashes in 2018 and 2019 that killed 346 people. .
In the Texas court filing, the U.S. Department of Justice accused Boeing of failing to “develop, implement and enforce a compliance and ethics program to prevent and detect violations of U.S. fraud laws throughout its operations.”
The company’s shares fell 1.5% in premarket trading Wednesday.
“We think this was the base case scenario, but also recognize that the range of potential outcomes is less clear, with additional fines and a further extension of the review period being the likely outcome,” Wolfe Research analysts commented on the DOJ decision on Tuesday.
“We do not pretend to know the full extent of the liability that Boeing may face, but we believe this is a distant secondary/tertiary risk to the company’s production problems,” they added.
The Justice Department’s finding follows a separate January incident in which a team blew up a new Boeing 737 MAX 9 during an Alaska Airlines flight on Jan. 5, exposing ongoing safety and quality problems at the plane maker just days before the 2021 agreement expired .