Authorities Accuse EADS Executives Of Insider Trading
French securities market authorities have alleged that European Aeronautic Defence and Space Co. executives engaged in insider trading involving stock options, during 2005- 2006.
The charges include breach of market information duties and breach of insider trading rules.
Allegations surround advance knowledge of troubles with delayed deliveries of the A380 jumbo jet made by Airbus, an EADS subsidiary.
"In the first step of what is likely to be a long process, the [French authorities have] considered that the elements gathered during the investigative phase of the enquiry, as interpreted by … investigators, do not justify a dismissal of the case," according to EADS.
Therefore, the authorities "will notify the company and the executives concerned of the nature of the charges against them."
EADS said it will underwrite the defense of the executives. Louis Gallois, The EADS CEO, said: "At last, EADS and its managers concerned will be in a position to defend themselves. EADS will support its managers in their defense; it intends to demonstrate that it has applied standards of excellence when communicating to the market, and has acted with full transparency."
Those corporate officers "intend to vigorously exercise their defense rights with the support of EADS, in front of the Sanction Commission of the [French agency] which will decide whether to impose fines after due hearing of the parties."
EADS asked that those charged be presumed innocent until proved guilty. Also, while the company expects the affair to have no impact on its profit-and-loss results, EADS "recognizes that these proceedings may have significant consequences on its image and reputation."