Embattled EADS Faces American Lawsuits
June 17, 2008
Two US law firms have filed a lawsuit against the European aerospace giant, accusing its managers of misleading investors about the company's finances and its ability to meet delivery deadlines for its A380 jet. Delays with the A380 superjumbo has caused major headaches for EADS.
New York-based law firm Dreier LLP, which filed one lawsuit, said in a statement Monday, June 16 that managers and core EADS shareholders engaged in "rampant insider trading based on their knowledge of the problems surrounding the A380."
EADS already knew in 2005 and 2006 that problems were looming and raced to sell their shares, according to the lawsuit.
Another lawsuit filed by San Diego-based firm, Coughlin Stoia, alleges EADS falsely assured investors that it would overcome technical problems related to the A380.
An EADS spokesman declined to comment on the lawsuits.
French investigators are looking into insider trading charges against more than a dozen of the company's top executives. They cashed in on about 20 million euros ($31 million) of gross profit from the sales just a short time before the company announced the A380 would be delayed. The announcement caused EADS stock to drop more than 30 percent.
The problems with the A 380, the world's largest commercial aircraft, provoked a crisis in EADS and Airbus, and led to former co-chairman Noel Forgeard being forced to step down. Forgeard is under formal investigation over the alleged insider trading. He has denied wrongdoing.