Stuttgart prosecutors have opened an investigation of DaimlerChrysler AG over allegations of insider trading surrounding the announcement that its chief executive was resigning, a prosecutors’ spokeswoman told The Associated Press (AP).
Prosecutors’ spokeswoman Tomke Beddies told the news agency the investigation was opened after the office was given the results of a probe by Germany’s BaFin financial services regulator, but would not provide details.
DaimlerChrysler spokesman Thomas Froehlich reportedly said the company was co-operating with authorities but declined to comment further.
AP noted that DaimlerChrysler announced on July 28 that CEO Juergen Schrempp would step down at the end of 2005 but rumours of his departure had already sparked a rally in the German-US company’s stock that morning.
BaFin reportedy opened its investigation in mid-August after saying it found “grounds” to suspect illegal trades in DaimlerChrysler shares just before the Schrempp announcement.
The regulator then asked banks to provide it with details of who bought and sold DaimlerChrysler shares so that it could search for links to anyone who knew of the company’s plans, AP added.
The news agency noted that company officials have declined to comment on BaFin’s insider-trading probe or the timing of its announcement that Schrempp, who was long criticised by shareholders, would go.