Porsche's (PSHG_p.DE) former CEO Wendelin Wiedeking is being investigated by prosecutors as part of a probe into suspected market manipulation in Volkswagen (VOWG.DE) shares, Porsche said.

The former chief financial officer of German carmaker Porsche, Holger Haerter, is also among people being investigated and Porsche's headquarters were raided as part of the probe.

Financial market regulator Bafin said on Thursday it has filed charges with Stuttgart prosecutors, adding a legal twist to what has been high corporate drama between the two carmakers.

Porsche confirmed media reports that Wiedeking, Germany's best-paid executive, and Haerter were among targets of the investigation. Neither was immediately available for comment.

Porsche, VW's majority shareholder, tried in vain to take over Europe's biggest carmaker only to abandon the campaign as its debt mounted, forcing it into a reverse takeover by its much larger peer.

That cost the jobs of Wiedeking and Haerter, whose wizardry with derivatives helped Porsche mount the daring raid on Volkswagen.

As part of the takeover, Porsche moved to seize control over more than 70 percent of Volkswagen's stock, causing Volkswagen ordinary shares to shoot up to 1,000 euros apiece last year, briefly making it the world's most valuable company.

Porsche said Stuttgart prosecutors had searched its offices and seized documents as part of a probe into suspected disclosure violations and market manipulation.

A source close to the investigation said private homes were also searched.

Porsche rejects the accusations that have been raised, the company said, adding it was cooperating fully with authorities.

Bafin declined to comment on whether specific individuals were being investigated or on the exact period under investigation.

Bafin said in May it had started an investigation into possible market manipulation by Porsche linked to its attempt to take over Volkswagen.

That case centered on a report by WirtschaftsWoche magazine that alleged Porsche had revealed in February 2008 its intentions to take a 75 percent voting stake in Volkswagen and pass a domination and profit transfer agreement, but did not make this public at the time.

Porsche denied the report at the time.

Porsche decided on March 3, 2008, to acquire the majority of voting shares in VW. There was no intention at that time for Porsche to raise its stake to 75 percent of the votes, Porsche said in a statement then.

($1=.7091 Euro)

(Reporting by Hendrik Sackmann and Edward Taylor; Additional reporting by Philipp Halstrick and Alexander Huebner; Editing by Michael Shields and Erica Billingham)