When Corporate Integrity Takes Flight
The Boeing Company Derivative Class Action
Let's just say the 21st century didn't launch smoothly for the financial markets. To be sure, in the wake of Enron and WorldCom, the public was dizzied and disenchanted with each new story of corporate misconduct. That dismay was particularly severe when news broke about the procurement scandal involving the Boeing Company. One of the largest manufacturing and defense contractors in the world, Boeing was entrusted with some of the most significant and sensitive government contracts. It was a darling of US enterprise, a poster child of industrial ingenuity. Nevertheless, in 2006, the company paid $615 million to settle government investigations into allegations that the company's top leadership had failed to properly oversee operations.Corporate governance reforms making the aerospace giant transparent, fiscally responsible and accountable to shareholders.
A hefty fine is one way to punish misconduct. But Labaton Sucharow sought reform; the kind of deeper change that would restore integrity to the company's procurement process. Reform that could fix Boeing from the top down, and the inside out.
In 2006, on behalf of plaintiffs in a derivative class action against the directors of Boeing, Labaton Sucharow secured a landmark settlement that established new and far-reaching standards of corporate governance. In addition to compelling the company to allocate some $29 million to establish and innovate its ethics and compliance programs, the settlement forced examination of the company's entire governance structure, assigning new responsibilities, mandating training programs, and setting forth specific standards for oversight, review, direction and planning. As a result of our advocacy, Boeing is a stronger company, more properly accountable to its real owners – not its officers and directors, but its shareholders.