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Business

Officials Investigate DaimlerChrysler

German regulators have begun a formal investigation into possible insider trading at DaimlerChrysler, officials said Tuesday. The probe began after the German financial services regulatory agency BaFin ran a check following a 10 percent hike in share prices before the resignation of Chief Executive Jürgen Schrempp last month. Officials suspect that company officials knew of the announcement and began illegal trading but declined to identify any suspects. Meanwhile, a number of top executives at German-US auto giant DaimlerChrysler are cashing in on the recent sharp rise in the company's share price, according to mandatory legal filings published on the automaker's website: six managers have exercised options to buy DaimlerChrysler shares at a discounted price and then immediately re-sold those shares at a much higher market price on the same day, reaping fat profits from the transactions. Two board members, Thomas Sidlik and Eckhard Cordes, and four other top executives, Harald Boestler, Herbert Kauffmann, Ulrich Walker, Wolfgang Diez and Guenter Egle, all liquidated their holdings since the announcement, netting a total 1.26 million euros ($1.56 million), according to DaimlerChrysler documents. Also, the managers received additional cash payments to make up for differences between the reference price and the actual strike price of the options, DaimlerChrysler said. All in all, the managers took home more than 1.5 million euros in profits from the deals. The transactions were criticized by shareholder groups, who argued that the variable components of managers' wages should not be linked to the share price but to a company's long-term profits and accused managers of dipping freely into company coffers.

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