The drop in value happened after substantial delays to Airbus's flagship A380 programme had been announced.
Mr Forgeard's lawyer, Jean-Alain Michel confirmed: "Mr Forgeard has indeed been placed under formal investigation for insider trading by two investigating magistrates after a very long discussion."
Mr Forgeard is reported to have denied any wrongdoing and to have said he had no knowledge of any by any other high-level staff of the EADS company.
EADS has made no comment as yet but its current chief executive, Louis Gallois, sent a letter to employees in April in which he stated his "confidence in EADS managers in total".
