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Wirecard Legal Issues

Nicola, Stefan and Claudia Rach. « Wirecard jumps the most during the week as a CEO unimpressed with Zatarra Report. » Bloomberg, March 2, 2016. July 5, 2020. . Although ethical issues are inherent in the field of audit services in its current form, individual actors within EY are nevertheless involved. Martin Dahmen, Andreas Budde, Andreas Loetscher and Ralf Broschulat have been responsible for approving Wirecard`s financial statements since 2013. They have negligently signed accounts without complying with their audit obligations, which raises the question of why they turn a blind eye as individuals, fail to comply with auditing standards and ignore Wirecard`s increasingly blatant fraud. . Since the various legal proceedings against individuals take place within the management of Wirecard, it is important to underline the responsibility of the external supervisory authorities BaFin and EY. Although Wolfgang Schirp has taken legal action against EY, there has been no direct investigation into BaFin`s negligence and possible « capture » in Wirecard`s long history of irregularities and fraud. In order to use the Wirecard scandal as a lesson to avoid regulatory appropriation, BaFin should be held liable along with EY or Wirecard`s management, albeit with different methods of legal redistribution. While individuals such as Markus Braun and Jan Marsalek will most likely have to resort to retaliatory justice for their immoral direct fraud and fraud, the Wirecard scandal highlights the need to reform financial market regulators to ensure compliance with commutative justice and fair play obligations.

McCrum, Dan. « The Strange Case of Ashazi: Wirecard in Bahrain, via Singapore. » FT Alphaville: House of Wirecard. N.p., May 5, 2015. 27 June 2020.`bullying is both direct ethical misconduct and a catalyst for such behavior by encouraging people to act against their moral choices. Methods of intimidation, such as those reported by FT and JCap journalists, also directly violate the demand for transparency as the basis for a fair financial market. To avoid and prevent such unethical practices, the external protection of whistleblowers and rapporteurs such as the FT and JCap by legal or regulatory bodies should be strengthened. This was not the case with the bullying of France Télécom and JCap by Wirecard. So far, former CEO Marcus Braun and Oliver Bellenhaus, managing directors of Dubai-based Cardsystems Middle East FZ-LLC, have been arrested. Germany has issued an arrest warrant for ex-COO Jan Marsalek, whose whereabouts are unknown, after immigration documents suggesting he was in the Philippines were found to be forged (Lopez). Thus, the immediate legal action is largely limited to the prosecution of agents within the management of Wirecard and its third-party subsidiaries. Bellenhaus` arrest underscores the importance of third-party companies in countries where Wirecard did not hold a banking license as a central element of Wirecard`s fraud.

Batino, Clarissa. « No Wirecard funds missing in the Philippines, » says the central bank. Bloomberg, June 21, 2020. June 21, 2020. . Henning, Eyk and Steven Arons. « Wirecard reportedly investigated the connection with Deutsche Bank in 2019, »

Bloomberg, June 22, 2020. June 22, 2020. . Deutsche Welle News. « Wirecard commits `sophisticated and sophisticated fraud`, say listeners: DW: 25.06.2020. » DW.COM. N.p., o. J. Web. July 20, 2020. . Maley, Karen.

« `There has been speculation of kidnapping threats`: J Cap. » Australian Financial Review. N.p., June 22, 2020. July 2, 2020. . Chanjaroen, Chanyaporn. « Wirecard (WDI DE) says missing money may not exist, pulls results. » Bloomberg, June 22, 2020. June 21, 2020.

. Lopez, Ditas B. « Faked Philippine Records Left False Trail for Wirecard Exec. » Bloomberg, July 4, 2020. 4 July 2020. . « Up and down: The Wirecard case: stock market history ».

N.P., January 31, 2019. 23 June 2020. . McCrum, Dan. « JCap on Wirecard: A Search for Asian Business. » FT Alphaville. N.p., November 20, 2015. July 1, 2020. . Syed, Sarah, Luca Casiraghi and Fabian Graber. « Wirecard (WDI DE) is seeking insolvency while billions are lost. » Bloomberg, June 25, 2020.

25 June 2020 . After all, although the Financial Times is inactive in making decisions about Wirecard, it is involved both in the consequences and in its own fulfillment of journalism`s purpose and duty to report potential wrongdoing. This is the key to a discussion about Wirecard`s duty of transparency and honesty. Dan McCrum and other journalists on his team were prosecuted and investigated in 2019 for possible collusion with short sellers. This raises questions about the principles of justice, as the FT appears to have come under more scrutiny than Wirecard following the 2019 reports. Matussek, Karin and Sarah Syed. « Former Wirecard CEO arrested in ongoing criminal investigation. » Bloomberg, June 23, 2020. 23 June 2020. . In 2008, Wirecard`s accounting integrity was first questioned by a German investor association SdK. The saga ended with the conviction of SdK officials Tobias Bosler and Markus Straub by the Munich Public Prosecutor`s Office for short selling and market manipulation in 2011 (

Thus began a trend to prioritise actions against unethical and illegal short sellers at the expense of regulators` investigations into Wirecard`s accounting practices. The trend was repeated in 2016 and 2019. The 2008 scandal included allegations against Wirecard for non-transparent reporting, suspicious M&A activity, aggressive profit claims and money laundering rumours related to illegal online gambling in the US. After this scandal, EY became an auditor for Wirecard. McCrum, Dan. « Wirecard`s House. » FT Alphaville. N.p., April 27, 2015. July 2, 2020. . Wirecard appeared to be off to a strong start in its second decade, securing a €900 billion deal with Japanese multinational SoftBank Group Corp, ranked the 36th largest company in the world by Forbes. EY has approved the 2018 financial statements. Meanwhile, the FT continues to publish details and cases of irregularities in Wirecard`s various areas of activity, particularly in Singapore, the Philippines and Dubai, which Wirecard constantly denies.

The legal war between the FT and Wirecard continued in 2019. Gavin, Mike. « Wirecard proposes a dividend for 2009 and confirms its target for 2010. » Bloomberg, April 15, 2010. June 30, 2020. . As for Wirecard`s criticisms, a number of small investors have long supported the company by joining allegations of short selling and market manipulation by the company and regulators. Critics point to the tendency of the German regulator, the press and the investment community to rally around Wirecard against what they perceive as an unfair attack.

[43] Softbank invested €900 million in 2019. [44] After the company`s bankruptcy became public, Softbank executives blamed the auditor for what they considered to be defaults,[45] and announced their intention to sue EY for damages,[46] and joined other efforts to take legal action against the auditor. [47] [48] Morgan, Jonathan. « Wirecard wins as Goldman forecasts strong revenue growth. » Bloomberg, September 4, 2013. June 25, 2020. . On 20 May 2021, Pavandeep Gill (Pav Gill), Wirecard`s Singapore-based senior legal counsel who handled all legal aspects of Wirecard`s activities and operations in the Asia-Pacific region, emerged as the whistleblower who provided the Financial Times with documents revealing the fraud. [42] From 2016 onwards, Wirecard faced an increasing number of « attacks » accusing the company of accounting manipulation and fraud. The Zatarra report, published anonymously via Twitter, accuses Wirecard UK of money laundering in the US for illegal online gambling, among other allegations of accounting irregularities and fraud. However, Zatarra`s anonymity and unverifiability made it possible to quickly dismiss these claims by Wirecard, which accused the Zatarra report of market manipulation by short sellers.

Wirecard has built much of itself on a framework of lies to maximize profits and growth.