Airbus SE (OTCMKTS: EADSY) is facing proposed class-action lawsuits filed by U.S. shareholders alleging that the European aerospace and defense company committed securities fraud.

Over the past few days, several law firms announced that they are suing Airbus on behalf of shareholders who are seeking unspecified damages. The move comes after the Wall Street Journal’s March 15 report about the company’s $4 billion bribery settlement.

In the proposed class-action lawsuit filed by shareholder Andrew Kornecki in the U.S. District Court for the District of, New Jersey, he alleged that Airbus made false and misleading statements regarding its business, operational, and compliance policies between 24 February 2016 and 30 July.

Kornecki also named Airbus current CEO Faury and his predecessor, Tom Enders, and current CFO Dominik Asam and his predecessor, Harald Wilhelm as defendants.

Allegations against Airbus and its executives

The shareholder specifically alleged that the defendants failed to disclose or made false and misleading statements that:

• Airbus’ policies and protocols were insufficient to ensure its compliance with relevant anti-corruption laws and regulations;
• The company committed bribery, corruption, and fraud to boost its business particularly its commercial aircraft, helicopter, and defense transactions;
• Airbus generated its earnings in part from unlawful conduct therefore unsustainable;
• The resolution of government investigations into allegations of corruption would foreseeable cost Airbus billions of dollars in settlements and legal fees and the company will be subject to ongoing government probes and oversight.
• The company’s public statements were materially false and misleading at all relevant times.

In August 2012, the United Kingdom Serious Fraud Office (SFO) launched a criminal investigation into GPT Special Project Management Ltd, a subsidiary of Airbus. The focus of the probe was GPT’s service contract in Saudi Arabia.

In August 2016, the SFO another criminal investigation into Airbus due to allegations that its aviation business engaged in bribery, corruption, and fraud related to “irregularities concerning third-party consultants.”

In 2017 and 2018, regulators in France and the United States opened their own investigation into the company based on the SFO’s allegations. On January 31, 2020, Airbus reportedly agreed to a $4 billion agreement with the UK, US, and French prosecutors to settle the charges against it.

On March 15, 2020, the Wall Street Journal reported that Airbus executives had previously raised red flags about fees paid to a number of middlemen working with its helicopter division. The matter was not previously disclosed to the public.  On July 30, the newspaper reported that the SFO charged GPT and three individuals with corruption in connection with its defense contract with the UK and Saudi Arabia.

The reports regarding the investigations, the $4 billion settlement, and the corruption charges resulted in the decline of Airbus ADRs and foreign ordinaries during the relevant periods.

“Unbeknownst to investors and the public, however, Airbus was at an increased and foreseeable risk of facing significant potential liabilities for other alleged illegal activities that would later be investigated by governmental authorities around the world. These activities, combined with the investigation into GPT, implicated all three of Airbus’s divisions, calling into question the sustainability of the Company’s reported earnings during the Class Period,” according to the lawsuit.