Archive for the ‘France’ Category

A judicial official says French police have detained a former Airbus president in an insider trading probe at its parent company EADS.

Newsweek is writing that Gustav Humbert was taken into custody Monday by financial investigators in Paris in connection with the probe of the aerospace and defense giant.

French authorities have already filed preliminary charges against two former EADS executives — former co-CEO Noel Forgeard and Jean-Paul Gut, a former deputy chief executive.

Investigators are probing share sales at EADS before a June 2006 announcement of delays for Airbus’ A380 superjumbo.

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.

FT.com wrote that Louis Gallois, chief executive of EADS, has warned France’s stock market authority that its investigation into alleged insider dealing at the Franco-German aerospace group could threaten the company’s fragile recovery unless it turns up “clear evidence” of wrongdoing.

“You can’t condemn people who have huge responsibilities, you can’t attack a company … without clear evidence,” he told the Financial Times in a recent interview. “This company is clearly on [the path to] recovery. I don’t want that jeopardised on rumours, on feeling. I want evidence, clear evidence. It’s too important.”

Mr Gallois, who says he is “fully confident” in his management team, has spared no effort in recent weeks to make his concerns known, as the AMF, the French regulator, finalised its report on controversial share sales by directors and shareholders in the weeks ahead of a shock profits warning.

The report will also take a view on whether the EADS board misled the market about delays to the flagship A380 superjumbo project at its Airbus subsidiary that led to the profit warning. The governing board of the AMF is expected to meet today to weigh the findings, handed to the 15-member “college” several days ago. A preliminary report on the allegations was leaked to French media last autumn and signalled concerns over insider dealing “on a massive scal e”, which the company and all those involved deny strongly.

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Interesting article and discussion in today’s DowJones US Financial News section regarding information sharing between different regulators and companies traded in various countries.

European financial regulators are in danger of being seen as complacent after claiming that nothing needs to change about how they communicate with each other after the Société Générale scandal.

The French securities regulator, the Autorité des Marchés Financiers, was criticized for its delay in informing other financial watchdogs about the troubles at SocGen in January.

Bankers said they were astonished at the lack of communication between market regulators, and there were calls for improvements to the structure.

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Mr. Robert Day, a member of the French bank’s board, disposed of a million shares on January 9 and 10, plus a further 500,000 on January 18, according to official disclosures of the Autorite des Marches Financiers (AMF), French market regulator.

A billionaire is likely to face a criminal investigation into insider dealing after selling £100 million of shares just days before Societe Generale’s rogue-trader losses were disclosed.

The AMF is investigating the case after complaints by minority shareholders who claim some protected themselves at the cost of less influential investors.