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Police probe ex-EADS chief for insider trading

  • Story Highlights
  • Investigators are looking into the sale of EADS shares by top execs, shareholders
  • Forgeard told judges "he had not committed insider trading," his lawyer says
  • French financial police quizzed Forgeard for two days this week
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PARIS, France (CNN) -- French authorities on Friday notified the former co-chairman of French aerospace giant EADS that he is under investigation for insider trading.

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Former co-chief exec of Airbus parent EADS, Noel Forgeard, has denied wrongdoing.

Noel Forgeard, who denies wrongdoing, has not been charged.

The move is an interim step in French legal proceedings and indicates charges are eventually possible.

French financial police picked Forgeard up for two days of questioning Wednesday, after which they freed him pending further investigation.

The French markets regulator said last month it had found evidence of insider trading at EADS, the parent company of Airbus, following an 18-month investigation.

The probe by regulator AMF was triggered by suspicious share trades by top EADS management and shareholders in the months before EADS revealed severe delays to the production of the Airbus A380 superjumbo jet in June 2006.

Word of the delays caused share prices in EADS to drop by 25 percent at the time.

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EADS reported in March 2006 that certain executives and major shareholders had sold shares during a pre-approved window. AMF decided to investigate whether anyone who sold those shares knew that bad news about the delays was coming.

Forgeard, who was fired soon after the June 2006 delay announcement, is among 17 people involved in the investigation. All deny wrongdoing.

Forgeard made a profit of about $3 million when he sold his stock in March 2006. His three children also sold stock options. Forgeard has said the timing of the stock sale and news of the delays were an unfortunate coincidence.

Christian Streiff was hired as chief executive to clean up the problems at Airbus, but he resigned in October 2006 after the company announced another lengthy delay in A380 production.

The A380 finally completed its first passenger flight last October after two years of delays and cost overruns.

CNN's Jim Bittermann contributed to this report.

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