A securities class action suit was filed against an aircraft design, manufacturing and distribution corporation following allegations it violated federal securities laws.
The lawsuit against The Boeing Company was filed in the U.S. District Court for the Northern District of Illinois on behalf of investors who purchased shares in the company during the class period from Feb. 9, 2012 through Feb. 11, 2016, according to a press release. The class action complaint alleged that the company violated certain laws under the Securities Exchange Act of 1934.
Boeing is an American multinational corporation that specializes in designing, building and selling aircraft, though its full catalog stretches into other areas. The corporation also develops, manufactures and distributes rotocraft, satellites and rockets. In addition, Boeing offers support services for its products. The company is split into five primary segments:
- Boeing Military Aircraft.
- Network & Space Systems.
- Global Services & Support.
- Commercial Airplanes.
- Boeing Capital.
The class action complaint against Boeing alleges the company and certain executives with it made materially false and misleading statements to investors regarding its business, operations and compliance policies. The lawsuit claims that Boeing’s use of an accounting program 787 Dreamliner and/or 747 jumbo aircrafts was based on inflated sales projections. In addition, the securities class action alleges the program relied on understated estimates of production costs. The lawsuit claims that as a result of the above allegations, the defendants’ public statements were false and misleading through the class period.
On Feb. 11, 2016, Boeing disclosed that the Securities and Exchange Commission was investigating the company’s methods for accounting for budgets, costs and expected sales for both the 787 Dreamliner and 747 jumbo aircraft. On this news, stock in Boeing dropped $14.26 per share, or 12.3 percent, to close at $102.10 per share during intraday trading on Feb. 11.