Germany investigates SAP insider trading charges

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MUNICH -- Germany's Federal Securities Supervisory Office is looking into allegations of insider trading of SAP AG's securities, a spokesman for the regulator confirmed today.

The investigation was launched by the securities industry regulator in January, according to Jurgen Oberfrank, a spokesman for the Federal Securities Supervisory Office. Those preliminary results were then turned over to the Heidelberg Public Prosecutors Office in March, he said.

The Prosecutors Office was informed quickly so that important records such as telephone lists could be secured, he said. SAP spokesman Moritz Gundolf today confirmed that the investigations are taking place, and said the Walldorf, Germany-based company had provided the Prosecutors Office with the information it needed.

Investigations by both entities are continuing, Oberfrank said, but it will be up to the Public Prosecutors Office to bring charges if wrongdoing is found.

The investigation was spurred by a routine check of "irregularities" in the trading of both SAP's stock and stock options, just prior to the software vendor's Jan. 5 announcement that its profits for the 1998 fiscal year would be lower than expected, Oberfrank said (see story).

Shortly before the announcement, SAP's stock took a dive, and there was higher-than-usual trading of SAP's stock options, the spokesman said.

This isn't the first time that such allegations of insider trading in SAP shares have surfaced. In 1997, the Public Prosecutors Office in Frankfurt began what became one of Germany's largest insider trading probes, with as many as 34 people both inside and outside of the company coming under suspicion.

Eventually, the charges were dropped against nearly all of the people. However, three SAP managers were determined to have "minor guilt" and paid a fine, while several more are still under investigation.

SAP's shares have fallen by approximately 10% over the past few days in trading on German exchanges, partly as a result of rumors of the investigation, according to financial analysts.

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