PARIS (AP) — A lengthy probe by French regulators suggests ''massive insider trading'' took place at Airbus parent EADS, judicial officials said Wednesday.
Current EADS chief executive Louis Gallois played down the findings, calling them preliminary. If confirmed, however, it would be yet another blow to the Franco-German consortium whose planemaker Airbus has been struggling against U.S. rival Boeing Co.
Preliminary findings were forwarded by the Financial Markets Authority to Paris prosecutors because ''the law requires us to do this once the facts are likely to be qualified as criminal,'' a spokeswoman for the regulator said.
Judicial officials said the preliminary report indicated ''massive'' insider trading by 21 top managers at European Aeronautic Defense & Space Co. NV between November 2005 and March 2006. The officials said the report was in the hands of investigating magistrate Xaviere Simeoni, who could file preliminary charges in the next few months.
The officials spoke on condition of anonymity because the investigation is ongoing.
The AMF is investigating how much executives and board members knew about profit-damaging technical problems with the A380 superjumbo and mid-range A350 aircraft when they sold shares or exercised stock options worth millions of euros.
Problems with the aircraft, and a profit warning, were publicly announced in June 2006, sending the EADS stock price crashing 26 percent in one day.
The AMF and Paris prosecutor Simeoni are conducting separate inquiries into alleged wrongdoing by executives at Airbus and EADS. The AMF spokeswoman said the probe, launched in mid-2006, would probably wrap up late this year or early next year.
German prosecutors are also investigating suspected insider trading at EADS.
Gallois, who was appointed to head Airbus after the period under investigation and who did not sell shares at the time, refused to comment, other than say the AMF investigation is incomplete.
Le Figaro daily reported that the AMF's note to prosecutors indicates that Arnaud Lagardere, then co-chairman of EADS; the EADS joint CEOs at the time, Thomas Enders and Noel Forgeard; some members of EADS' executive committee; and Airbus' then-CEO Gustav Humbert were well aware of the problems plaguing the A380 and A350.
Forgeard and his children exercised stock options in the company at a profit of 2.5 million euros ($3.2 million) in March 2006, according to AMF filings. Forgeard has denied wrongdoing.
EADS shareholders Lagardere SCA of France and DaimlerChrysler AG announced in March 2006 that they would reduce their stakes.
The French state — another key shareholder in EADS — also was warned about the problems, Le Figaro said, citing a note to then-Finance Minister Thierry Breton in December 2005 suggesting that the government reduce its 15 percent stake in the company.
French government officials would not comment Wednesday on the AMF's findings.
Airbus and EADS have been shaken over the past year and a half by management strife, the insider trading accusations and the strong euro, which means the planes are less profitable because they are sold in dollars.
Airbus' position as the world's dominant planemaker has slipped behind Boeing, and the Toulouse, France-based planemaker is undergoing an ambitious restructuring plan that foresees thousands of job losses and sensitive factory closures.
EADS fell 0.9 percent at 21.68 euros ($30.77) in Paris — still far below their level above 30 euros at the time of the stock sales in 2005 and 2006.
Shares of Lagardere SCA dropped more dramatically, down 5.7 percent at 58.30 euros ($82.58).
Associated Press writers Emma Vandore and Verena von Derschau in Paris contributed to this report.
