Paris - The most high-profile cases of insider trading in Europe of recent years entered a crucial phase Monday when 17 current and former executives of aerospace giant EADS and its subsidiary Airbus began testifying before a French market watchdog. The executives and three companies - EADS and its major shareholders Chrysler and Lagardere - are accused of selling EADS shares after learning of production problems with the Airbus A380 superjumbo, but several months before those problems were made public.
At the time they sold their EADS shares, in March 2006, they stood near their historic high, at about 30 euros (currently about 45 dollars) per share.
When EADS eventually announced, in June of that year, that the problems would cause delays in the deliveries of the A380 to its customers, the shares lost 26 per cent of their value in one day.
The five-day hearing before the Financial Markets Authority (AMF) comes after an investigation of 30 months. The AMF is seeking more than 12 million euros in fines.
A report drawn up in July by the AMF's investigator in the case said former EADS co-chief Noel Forgeard and six others profited illegally from their privileged information and accused EADS of not making the information public early enough.
Forgeard faces the stiffest punishment, 5.45 million euros in fines. He earned 3.5 million euros from exercising his EADS share options, but his lawyers say they can prove that he began selling his shares before company managers became aware of the A380's problems.
