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France: Insider trading at Airbus firm

PARIS, France (CNN) — The French markets regulator said Tuesday it has found evidence of insider trading at EADS, the parent company of Airbus.

In a report following an 18-month investigation, regulator AMF also alleged EADS had misled financial markets by failing to meet standards on the publication of information.

While AMF’s announcement did not mention Airbus specifically, its investigation was triggered when top management and shareholders carried out suspicious share trades in the time before EADS revealed severe delays to the production of the Airbus A380 superjumbo jet in June 2006.

Word of those delays caused shares in EADS to drop by a quarter at the time.

EADS had reported in March 2006 that certain executives and major shareholders had sold shares during a pre-approved window, but AMF decided to investigate whether anyone who sold those shares knew the bad news about the delays was coming.

Aviation analyst Howard Wheeldon, of brokerage firm BGC Partners in London, said the French investigation initially involved 21 people.

What they actually knew or didn’t know in terms of the delay, (whether) there would be a delay announcement forthcoming — it’s very difficult, it’s very complicated, Wheeldon told CNN. But I do seem to get the impression that the French regulatory authorities have got a long way down the line.

French reports about the investigation have previously pointed to former EADS Director Noel Forgeard, who was fired soon after the delay announcement in June 2006.

Forgeard made a profit of some $3 million when he sold his stock in March 2006, and his three children also sold stock options. Forgeard has said the timing of the stock sale and news of the delays were an unfortunate coincidence.

Christian Streiff was hired in July of 2006 to clean up the problems at Airbus, but he resigned in October of that year after the company announced another lengthy delay in A380 production.

The A380 finally completed its first passenger flight last October after two years of delays and cost overruns.
France: Insider trading at Airbus firm – found here.

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April 2, 2008 - Posted by | Uncategorized

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