There's no such thing as a golden rule of investing. But if there were, I'd guess it would go something like this: Don't invest money with managers you can't trust, especially if the insiders don't trust each other.
According to Bloomberg, Airbus co-chief executive Tom Enders has indirectly criticized French partner Noel Forgeard for ill-timed stock sales. Enders told Bloomberg through a spokesman that while it would have been lucrative to sell shares of stock in Airbus parent EADS weeks before problems with the A380 first surfaced, doing so wouldn't have been "appropriate."
Ouch. Bloomberg never did get clarification as to what constitutes "appropriate," but the statement intimates that Forgeard knew there were problems with the A380 superjumbo long before he pocketed 2.5 million euro in stock-driven profits.
The sales certainly look funny: Forgeard, three of his children, and two EADS board members all sold shares in March. Then, in early April, institutional holders DaimlerChrysler
For his part, Forgeard has called the sales nothing more than an unfortunate coincidence. Maybe, but as Foolish friend Seth Jayson points out, it was really unfortunate if you were an EADS shareholder. And Forgeard himself has told French media that internal reports of problems with the A380 first surfaced in April, not long after the sales in question.
French and German securities regulators are now investigating. It's anyone's guess as to whether charges will be filed, but I find it interesting that The Wall Street Journal reports that the French AMF (Autorite des marches financiers) has already been investigating events at EADS for "several weeks," and the latest news surrounding the A380 delay would be included in the probe.
Last week, I wrote that Boeing
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Fool contributor Tim Beyers thinks a scoop of ice cream baking in the summer sun would be hard-pressed to melt down as fast as Airbus has. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out which stocks he owns by checking Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.
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