The German securities regulator said on Friday it would decide next week whether to start a formal insider trading probe into film rights dealer Kinowelt Medien .

"Our analysis has been positive. We have noted peculiarities in advance of the publication of Ad-Hoc-News", Sabine Reimer, a spokeswoman for the regulator, said. "One can expect, that there will be a formal probe." She said a formal decision would be taken on Tuesday.


"We are looking calmly at this probe, it is a routine investigation", a Kinowelt spokesman told Reuters.


Kinowelt said on March 23 it had failed to meet its 2000 earnings targets after core profit dropped to $21.2m (DM49m) from $28.0m (DM65m) the year before.


Within the three days ahead of the announcement the Kinowelt stock had lost some 40 percent of its value. Kinowelt said it believed its stock had suffered as a result of negative analyst comment about the company's earnings prospects.


"There is no concrete indication (of insider trading)", the Kinowelt spokesman added.


On Monday, Kinowelt posted an unexpectedly high first-quarter loss before interest and tax (EBIT) of 30.3 million euros and halved its full-year forecast. By midday on Friday, shares in Kinowelt were trading 2.5% down at Euros3.90.