French judges filed preliminary insider trading charges yesterday against Noel Forgeard, a former co-chief executive of Airbus parent EADS, his lawyer said.
Forgeard is at the center of one of France’s largest alleged insider trading probes, involving one of Europe’s biggest industrial players.
Investigators are looking into the sale of millions of dollars worth of EADS shares by top executives and shareholders before a June 2006 announcement of delays for the A380 superjumbo that drove EADS shares down 26 percent in one day.
The investigating judges ordered Forgeard freed after two days in the custody of financial police pending further investigation, his lawyer Jean-Alain Michel said.
Forgeard, who has denied wrongdoing, told judges Xaviere Simeoni and Cecile Pendaries during questioning “that he had not committed insider trading” and that to his knowledge neither had any other EADS executives, his lawyer said.
Preliminary charges under French law mean the investigating judges have strong reason to suspect involvement in a crime and give them more time to investigate. Judges decide later whether or not there is enough evidence for a trial.
These charges do not mean “an element of guilt,” Michel said.
Forgeard was placed in police detention on Wednesday, but spent the night in hospital because of slight respiratory problems.
His lawyer said he had found the experience of being held in a sparse police cell “overwhelming.”
“When you are someone like Mr Forgeard, who has had an exceptional industrial career, it’s very difficult to find yourself in detention ... but he has courage and he survived the shock. He has good morale,” Michel said.
“I am convinced we will succeed in demonstrating that he didn’t commit insider trading. We have very good evidence to prove that,” the lawyer added.
The charges against Forgeard were a new embarrassment for EADS as it emerges from a rocky couple of years plagued by trouble with the A380 and management turmoil. Airbus is also now suffering the fallout of difficulty in the global airline industry linked to soaring fuel prices.
The judges’ probe into alleged insider trading at EADS was opened in late 2006.
Last month, French financial market regulator AMF initiated insider trading sanctions procedures against Forgeard and 16 of his former colleagues, many of whom continue to work for EADS. The Amsterdam-based company is run by a joint French-German management team.
EADS CEO Louis Gallois said in a letter to employees last month that his “confidence in EADS managers is total.”
Forgeard was named co-CEO of EADS with Thomas Enders, now head of Airbus, in 2005. Between November 2005 and March 2006, Forgeard, his family members and other EADS executives exercised millions of dollars in stock options.
The delays to the A380 were announced in June 2006, and Forgeard resigned weeks later.
In a newspaper interview last month, Forgeard was quoted as saying he is “innocent,” but acknowledged that “in hindsight, it would have been better if I hadn’t” sold the shares when he did.
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