BaFin bans short sales of Wirecard shares

The share price de­vel­op­ment of Wir­e­card AG feels like a roller coaster ride. Within only a few years, the pay­ment ser­vice pro­vider… from Asch­heim (close to Mu­nich) grew from a little star­tup to a Fine­tech cor­por­a­tion mak­ing mult­i­bil­lion in rev­enue. Since 2015 the value of the shares has al­most tripled.

When faced with the ser­i­ous al­leg­a­tions of the Brit­ish Fin­an­cial Times, the share price was put un­der massive pres­sure within re­cent weeks. The Fin­an­cial Times ac­cuses the com­pany of ac­count ma­nip­u­la­tion and doc­u­ment falsi­fic­a­tion, al­legedly com­mit­ted at a sub­si­di­ary of Wir­e­card AG in Singapore.

Ac­cord­ing to an­other Fin­an­cial Times re­port, a law firm has in­formed the man­age­ment about fraud cases. These al­leg­a­tions are ser­i­ous. Wir­e­card denies the ac­cus­a­tions and filed a com­plaint about mar­ket ma­nip­u­la­tion against un­known. The Mu­nich pub­lic pro­sec­utor in­vest­ig­ates against un­known be­cause of mar­ket manipulation.

For re­cent events, there are only two ex­plan­a­tions: Either the com­pany has ac­tu­ally be­haved and tricked, or else the com­pany has – again – be­come the vic­tim of mar­ket manipulation.

The Bundes­an­stalt für Fin­an­zdi­enstleis­tung­sauf­sicht (BaFin) thinks that the com­pany has be­come the vic­tim of mar­ket ma­nip­u­la­tion and is­sued a gen­eral de­cree on Feb­ru­ary 18th, 2019, after which short sales of Wir­e­card shares were banned. 

It’s not for the first time that Wir­e­card is the sub­ject of ser­i­ous al­leg­a­tions. In 2008 and 2016, al­leg­a­tions were filed against the com­pany, which were also clas­si­fied as so-​called short-​attacks, as short-​selling had be­nefited from cor­res­pond­ing po­s­i­tions. The law en­force­ment agen­cies and BaFin also in­vest­ig­ated these cases for mar­ket ma­nip­u­la­tion, and the pro­sec­utor is­sued penal or­ders at the end of 2018 against au­thors of an ana­lysis of Wir­e­card on the In­ter­net, called Za­tarra. We are yet not able to as­sess whether the re­cur­ring al­leg­a­tions against Wir­e­card AG are jus­ti­fied. In this case, the share­hold­ers would have the right to raise claims for dam­ages against Wir­e­card AG.

If you are in­ter­ested in fur­ther in­form­a­tion about this topic, do not hes­it­ate to con­tact us.

We are watch­ing the market!

As a con­tact per­son and for any quer­ies you are wel­come to contact:

Dr. Wolfgang Schirp, At­tor­ney, Part­ner, Spe­cial­ized law­yer for bank­ing and cap­ital mar­ket law, Schirp & Part­ner Recht­san­wälte mbB, Leipzi­ger Platz 9, 10117 Ber­lin, Tel. 030-3276170, mail: schirp@​schirp.​com

Dr. Susanne Schmidt-​Morsbach, At­tor­ney, Part­ner, Spe­cial­ized law­yer for bank­ing and cap­ital in­vest­ment law, com­mer­cial and com­pany law, Schirp & Part­ner Recht­san­wälte mbB, Leipzi­ger Platz 9, 10117 Ber­lin, Tel. 030-3276170, mail: schmidt-​morsbach@​ssma.​de