The European aerospace group EADS, its shareholders and executives are likely to face their first transatlantic class action lawsuits over alleged insider dealing and potentially misleading the market, in a sign of growing tendency by investors to use the more aggressive US class action system to demand compensation for alleged wrongdoing in European companies.
Dreier, a law firm in New York, said it had filed a lawsuit alleging that EADS, the corporate parent of Airbus, and its controlling shareholders committed securities fraud and insider trading related to delays in deliveries of the A380 super jumbo jet in 2005 and 2006.
Another firm, Coughlin Stoia Geller Rudman & Robbins of San Diego, said that it had filed a similar complaint, on behalf of an unidentified institutional investor. That lawsuit alleges violations of the U.S. Securities Exchange Act by EADS or its executives.
Both suits were filed in U.S. District Court in New York City.
Even though EADS has never been quoted in the US but the plaintiffs’ lawyers argue that the group’s US activities and international statements provide sufficient grounds for US courts to have jurisdiction. Lawsuits aim to represent U.S. investors who bought stock on European exchanges in EADS, Europe’s largest aerospace group.
In the United States, competing class-action lawsuits can be filed by anyone seeking to act as lead plaintiff on behalf of a class of investors. A judge then decides whether the class exists and who is best placed to represent it.
EADS disclosed serious problems in building the A380 in June 2006, sending its shares down 26 percent in one day. That came weeks after core shareholders and some executives had allegedly sold shares of EADS.