PARIS — The French market regulator on Thursday cleared 17 current and former executives of Airbus parent company European Aeronautic Defence and Space Co. of insider trading in a multimillion-dollar scandal, citing a lack of evidence to show they used knowledge of delays to the A380 superjumbo program when selling their shares.
The decision follows a nearly 3-year probe, and a week of closed-door hearings, into what the EADS executives and board members knew about technical problems with the A380 and the mid-range A350. They were suspected of using such insider information when they sold shares or exercised stock options worth millions of euros in 2005 and early 2006.
When the A380 problems were made public in June 2006, EADS shares plunged 26 percent in one day and the company sank into months of management troubles.
Technical problems were discussed at meetings Feb. 17 and March 1, 2006 — before the major share sales.
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However, the regulator ruled that knowledge of the aircraft technical problems could not be considered "privileged information," that is "precise information that could have a notable influence on the share price of corresponding financial instruments."
The regulator, called the Financial Markets Authority or AMF, said it was common for executives to discuss production delays and technical problems for a new aircraft program.
EADS and two major shareholders who had been reducing their stakes in the company, Lagardere and Daimler, also were cleared in the AMF report.
EADS welcomed the verdict and said it "is confident that this point of view will also prevail in all other pending proceedings based on the same facts."
Five of those questioned by investigators, including former EADS co-president Noel Forgeard, still face judicial proceedings that could lead to a court trial. Forgeard has insisted he's innocent.
Forgeard's lawyer Olivier Gutkes hailed the AMF decision as a "victory of truth and law" and said he expects his client will be cleared in any criminal trial.
The AMF regulatory probe had named 17 EADS and Airbus officials as suspects, but chief investigator Antoine Courtault narrowed the list down to seven people suspected of selling shares in the March 8-21, 2006, period.
The suspects included Jean-Paul Gut, a former deputy chief executive who oversaw strategy; chief Airbus salesman John Leahy; Andreas Sperl, director of the EADS site in Dresden; Olivier Andries, a former EADS vice president; human resources director Erik Pillet, and Alain Flourens, in charge of training centers.
Each of the seven faced millions in potential fines if found guilty of insider trading.