Be Careful What You Say On A Cell Phone
It is reported today that French police have uncovered a recorded cell phone call between Jean Douani and Alain Garcia, then executive vice president in charge of engineering at da Festung.
The investigation, of course, is part of an insider trading scandal that rocked the European financial world. The timing of large trades in EADS stock by insiders in advance of a significant downturn is what's driving the investigation.
What's interesting about the call is the timing and the subject material. The call occurred in October of 2005, and Douani says it concerned production delays in the A380 program. Also of interest is a meeting of Airbus executives on March 7, 2006, wherein a discussion was held concerning the manifold technical problems in the A380 program.
Why's this interesting? Because Noel Forgeard and other highly placed Airbus insiders unloaded large holdings of EADS shares, which declined in value by better than 25 per cent when the production delays in the A380 program became common knowledge later on in the year.