What is in this article?:
- Lagardere and Daimler to Stand Trial Over EADS Insider Trading
- Investor Group Hails Magistrate's Decision
Noel Forgeard, the former joint chairman of Airbus parent company EADS, and John Leahy, the current Airbus chief operating officer for customers, will also face trial, along with five other executives
PARIS -- French conglomerate Lagardere (IW 1000/431) and German auto giant Daimler (IW 1000/18) have been sent for trial in France for alleged insider trading in the sale of shares in aerospace and defense group EADS (IW 1000/52).
Noel Forgeard, the former joint chairman of Airbus parent company EADS, and John Leahy, the current Airbus chief operating officer for customers, will also face trial, along with five other executives, judicial sources said.
Under French law, anyone convicted of insider trading is liable for up to two years in prison and a fine of up to 10 times the amount deemed to have been saved or gained as a result of the illegal deals.
Lagardere and Daimler, who both vigorously contest any wrongdoing, are alleged to have sold 7.5% stakes in EADS in early 2006 based on the knowledge that Airbus was encountering problems with the production of its A380 super jumbo.
The two groups revealed the share sales on April 6, 2006. Two months later, Airbus announced a six-month delay in the first deliveries of the A380, which caused a sharp fall in EADS' share price.
France's stock market regulator AMF carried out an investigation into the conduct of Lagardere, Daimler and 17 EADS executives. The regulator concluded in 2009 that there was no evidence any of the shareholders had sought financial advantage through the illegal use of privileged information.
That did not satisfy a group of small investors, APPAC, who registered a criminal complaint that led to a full-blown probe by examining magistrate Serge Tournaire, who specializes in complex financial cases.