EADS faces more financial regulatory trouble as US investors lodge a complaint alleging the company falsely assured the public the Airbus A380 aircraft would meet production deadlines.
Law firm Coughlin Stoia has begun the case on “behalf of an institutional investor in the United States District Court for the Southern District of New York on behalf of US citizens who purchased the publicly traded stock of EADS on the Frankfurt, Madrid and/or Paris stock exchanges between January 17 2006 and June 13 2006”.
“The complaint alleges that, throughout the class period, EADS falsely assured the investing public that it would overcome the technical problems in the production of the company’s Airbus A380 commercial jets and it would be able to meet its year-end delivery deadlines,” a statement by the law firm said.
“Moreover, the company issued numerous positive statements which described the company’s increasing financial performance. According to the complaint, these statements were materially false and misleading.”
In April this year, French financial regulator AMF sent its dossier on its investigation into possible insider trading at EADS to the Paris public prosecutor.
Earlier this month, former EADS chief Noel Forgeard was charged with insider trading for selling shares before disclosing production delays for the A380.
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The insider trading charges do not include allegations Forgeard provided false information to the markets.
Forgeard faces as much as two years in prison and fines equal to ten times the profit on any illegal share sales.
The EADS insider-trading probe was triggered by worsening delays to production of the A380 superjumbo, which sliced a quarter off EADS stock in June 2006.
A number of EADS executives, including Forgeard, exercised their right to sell stock options in March 2006, but the deals fell under the spotlight when EADS unit Airbus announced serious production difficulties with the A380 superjumbo in June that year.
As many as 17 other executives at EADS and its Airbus unit are under investigation in a related civil case.
By Elizabeth Clifford-Marsh