French Judiciary dithers over constitutionality of Airbus Group insider dealing trial

It took eight years of investigating to bring seven past and present executives of Airbus Group to trial, and only a matter of hours for that trial to come to a grinding halt. The reason? The French court in question, headed by lead Magistrate Bénédicte de Perheus, has decided that the whole concept of a trial needs reviewing by a higher judicial system in France, the Court of Cassation, to decide whether this trial is even constitutional. Part of the problem facing the prosecution is that some five years ago the French stock market regulator had cleared EADS (European Aeronautic Defence and Space Company), as Airbus Group was then called, of any wrongdoing.
It would appear the case is not just against seven individuals, but also two major companies, Germany’s Daimler and Lagardère, a French-owned company, who were selling off a certain amount, but not all of their holding in EADS around the time in 2006 which this trial is centered on. From what we can gather though, this isn’t a clear case of establishing what was and what was not known at the time shares were sold. The principal complication arises from when EADS was first formed in 2000 and a right given to those executives with share options to exercise them in 2006, which they promptly did, and as is not unusual with stock options. According to the New York Times, “The biggest problem that some of the individual executives are said to have known about when they sold their stock involves mounting delays and cost overruns for the twin-deck A380 “superjumbo,” the world’s largest passenger jet. Troubles linked to the design and installation of the A380’s electrical wiring eventually snowballed into a devastating three-year delay in deliveries, leading to a management reshuffling, the elimination of 10,000 jobs and more than $6 billion in losses.”
With a combination of many stating that critical information was widely known and not the sole knowledge of the seven executives, the stock options being exercised at a logical time, and the French stock market regulator already clearing EADS of any wrongdoing, one has to question whether there really is a constitutional case after all. If not, after eight years of investigation and the assembly of major prosecution and defense teams, somewhere there is going to be a very big bill to pay, presumably picked up by the taxpayer as usual.

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