Management of aerospace and weapons manufacturer EADS suspected of widespread insider trading
Finnish personnel manager among targets of investigation
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France's stock market watchdog, the Autorité des Marchés Financières (AMF) has submitted the findings of its extensive investigation into the dealings of top managers of the European aerospace group EADS to prosecutors for consideration. According to the newspaper Le Figaro, AMF suspects that the executives sold off shares before unveiling problems at Airbus, the EADS aircraft unit.
According to Le Figaro, AMF suspects that 21 top figures in European business were involved in "massive insider trading deals between November 2005 and March 2006".
The report was later confirmed by AMF itself. There were no comments from the parties involved, but the news nevertheless had serious repercussions.
A massive selloff occurred shortly before Airbus announced a delay in the manufacturing schedule of the A380 airliner, and a significant rise in development costs.
One of the names on the list of suspected inside traders was Jussi Itävuori, the Finnish personnel chief of EADS, and a member of the management team.
While Itävuori sold many of his holdings, he made a public accounting of the changes in his EADS portfolio. In late July 2005 he bought 500 shares, paying the staff price for them, which was EUR 9,430.
In March 2006 Itävuori made two big sales two days apart. At first he sold 95,000 shares that he had received through three stock option programmes, yielding him a return of EUR 1.2 million. Two days later he converted 37,000 options into shares and sold them immediately for a net return of EUR 556,480.
These deals are unlikely to meet the standard for prosecution for insider trading, because Itävuori made the deals on a very public level. Prosecutor Xaviere Simeon might have information on other possible deals in the material submitted by AMF.
Jussi Itävuori is a member of the board of the Finnish state arms manufacturer Patria, as are two other top figures working for EADS. Patria Chairman of the Board Risto Virrankoski said on Wednesday that he is well aware of the insider trading allegations concerning EADS, which have been under investigation for some time.
"Mere suspicions do not affect the status of Itävuori on the Patria board, unless they lead to a conviction. I have no reason to believe that there would be a negative outcome here. The stock deals have been primarily coincidental", Virrankoski says.
Itävuori said through his secretary on Wednesday that he does not want to comment on the matter.
The French investigators do not believe in coincidences. They suspect that the insider information was deliberately misused. The list of suspects reads like a Who's Who of French and German corporate management.
Helsingin Sanomat
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| 4.10.2007 - TODAY |
 Management of aerospace and weapons manufacturer EADS suspected of widespread insider trading |
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