The daily business briefing: September 23, 2022
Boeing to pay $200 million for misleading investors about 737 MAX, watchdog says pandemic-relief unemployment fraud reached $45.6 billion, and more
Boeing to pay $200 million for misleading investors about 737 MAX
The Securities and Exchange Commission said Thursday that Boeing will pay $200 million to settle civil charges over allegations it misled investors about its 737 MAX jets. The planes were grounded for 20 months after two crashes, one in Indonesia and the other in Ethiopia, that killed 346 people. The SEC said as it announced the settlement that the aircraft maker knew a flight-control system "posed an ongoing airplane safety issue, but nevertheless assured the public that the 737 MAX airplane was 'as safe as any airplane that has ever flown the skies.'" Former Boeing chief Dennis Muilenburg has agreed to pay $1 million under the settlement, the SEC said. Investors lost billions after the crashes and subsequent grounding.
Federal watchdog triples estimate of pandemic relief unemployment fraud
The Labor Department inspector general's office on Thursday tripled its estimate of the pandemic relief funds wrongly distributed due to fraud, including duplicate payments, and money sent to dead people, federal prisoners, or others with suspicious email accounts. The federal watchdog previously said that about $16 billion in special unemployment insurance went out to fraudulent recipients, but it now says the payments probably totaled $45.6 billion. Investigations have led to criminal charges against more than 1,000 people, the office said. Larry Turner, the inspector general, said in a statement announcing the assessment that the funds attracted "fraudsters" looking to exploit the program, "resulting in historic levels of fraud and other improper payments."
Senate moves toward considering stopgap spending bill to prevent shutdown
Senate Majority Leader Chuck Schumer (D-N.Y.) on Thursday started the process of considering a stopgap spending bill needed to prevent a partial government shutdown at the end of next week. The bill includes billions of dollars for Ukraine, a detail expected to help it pass, but lawmakers say they'll continue debating that and other details over the weekend. Schumer reportedly aims to bring the bill up for a vote on Tuesday. Senate Democrats plan to include Sen. Joe Manchin's (D-W.Va.) energy infrastructure permit streamlining legislation, but Republican leaders said the measures probably wouldn't get the 60 votes needed to avoid a filibuster. House Speaker Nancy Pelosi (D-Calif.) said the House is ready to consider the legislation quickly under the "same-day rule" once the Senate passes it.
FedEx to hike shipping rates 6.9 percent as delivery demand falls
FedEx announced Thursday that it plans to raise most of its shipping rates by an average of 6.9 percent to offset a global decline in deliveries as inflation dents consumer demand. The announcement of the hikes, set to start in January, came days after FedEx sharply cut its profit and sales forecasts. FedEx and rival United Parcel Service hiked their rates an average 5.9 percent this year, The Wall Street Journal reports. It was the first time they had increased prices by more than 4.9 percent in eight years. FedEx said this week that its quarterly profit fell 20 percent compared to a year earlier. It said daily package volume was down 11 percent from a year earlier, the third quarterly decline in a row.
Stock futures fall, adding to week's losses
U.S. stock futures fell early Friday after this week's big Federal Reserve interest rate hike fueled fears of a recession. Futures tied to the Dow Jones Industrial Average and the S&P 500 were down 1.1 percent at 6:45 a.m. ET. Nasdaq futures were down 1.3 percent. Costco shares were down 2.6 percent after the warehouse retailer reported better-than-expected quarterly revenue and earnings but said it was facing higher freight and labor costs. All three of the main U.S. indexes fell on Thursday, putting them all on track for weekly losses. The Dow and the S&P 500 fell 0.3 percent and 0.8 percent, respectively, on Thursday. The tech-heavy Nasdaq dropped 1.4 percent.