French regulator drops A380 insider trading

AMF, the French stock market regulator, last week cleared 17 current and former EADS/Airbus executives of wrongdoing regarding alleged insider trading related to A380 program delays.

AMF since 2006 has investigated whether EADS and Airbus executives inappropriately sold off EADS shares prior to Airbus's June 2006 announcement of A380 program delays that led to an immediate 26% drop in EADS' stock price. Airbus CEO Thomas Enders, COO-Customers John Leahy, former EADS co-CEO Noel Forgeard and former EADS co-Chairmen Arnaud Lagardere and Manfred Bischoff all were among those alleged to have profited improperly from advance knowledge of A380 delays.

Forgeard in particular was questioned about his sale of €2.5 million ($3.6 million) worth of stock options three months before Airbus announced the A380 delay and was even detained briefly in May 2008 by French police for questioning on the matter (ATWOnline, May 29, 2008). He repeatedly described the sale's timing as an "unfortunate coincidence."

AMF concluded, "It cannot be considered that the accused gained privileged information about the significant increase in production costs for the A380 program during [winter 2006] meetings. . .The accusation concerning use of privileged information must therefore be dropped." However, AMF in 2008 forwarded information on the issue to French prosecutors, who have not announced the results of their criminal probe.

EADS reiterated in a statement last week that it has "complied with all applicable market information duties, in particular in respect of risks affecting the A380 program." It said it was "confident that [AMF's] point of view will also prevail in all other pending proceedings based on the same facts."