French court orders trial for EADS execs, Daimler, Lagardere in insider trading probe
PARIS - A French court on Monday ordered a trial for carmaker Daimler AG and industrial conglomerate Lagardere SCA as well as executives for Airbus parent EADS in an insider trading investigation dating back to 2006.
In addition to the two companies, which were shareholders in EADS, seven current or former EADS and Airbus executives were ordered to stand trial. They include John Leahy, the current Airbus chief operating officer, and Noel Forgeard, the former co-CEO, Paris prosecutor spokeswoman Agnes Thibault-Lecuivre said.
At the heart of the investigation is what executives and board members knew about profit-damaging technical problems with the A380 superjumbo and mid-range A350 aircraft when they sold shares or exercised stock options worth millions in 2005 and 2006.
When the A380 problems were made public in June 2006, EADS shares plunged 26 per cent in one day and the company sank into months of management troubles.
Technical problems were discussed at meetings Feb. 17 and March 1, 2006 â€” before the major share sales.
In 2009, France's market regulator, the AMF, cleared Lagardere and Daimler as well as about 10 EADS or Airbus officials in a separate inquiry â€” a decision both Lagardere and EADS recalled in statements Monday.
The regulator ruled that knowledge of the aircrafts' technical problems couldn't be considered "privileged information," that is "precise information that could have a notable influence on the share price of corresponding financial instruments."
Forgeard also has said he is innocent. Daimler confirmed the charges had been filed, but declined to comment further.
The inquiry by the Paris prosecutor was separate from that of the market regulator.
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