Wirecard: Model Proceedings Registration – Invitation To The Webinar
The model proceedings initiated in March 2022 are gaining momentum. (more…)
The model proceedings initiated in March 2022 are gaining momentum. (more…)
In the criminal trial against three former managers of Wirecard AG, the questioning of ex-Wirecard-CEO Markus Braun continued. (more…)
The Federal Financial Supervisory Authority (BAFin) is not liable to injured Wirecard investors. This has now been decided in the second instance by the Frankfurt Higher Regional Court (1 U 173/22), thus confirming the ruling of the lower court.
In June 2020, the financial services provider was forced to admit that 1.9 billion euros, which should have been in escrow accounts in Asia, could not be found. As a result, the share price plummeted dramatically, and Wirecard had to file for insolvency a short time later.
As a result, the German financial supervisory authority also came under heavy criticism. For years, the BAFin had protected the then Dax company and failed to discover the fraudulent activities.
Nearly 500 proceedings by aggrieved investors are pending before the Frankfurt Higher Regional Court, claiming damages from BAFin. In the specific case, claims for damages of approximately 40,000 euros were at issue.
However, the court now ruled that the authority had not violated its official duties. Thus, the plaintiff had “not presented any tangible evidence for the assumption” that BAFin should have commissioned a special audit at an earlier point in time. The court also ruled out a claim for damages for breach of official duty. The fact that employees of the supervisory authority held shares in Wirecard AG was also “not immoral”.
The decision of the Frankfurt Higher Regional Court is not yet final.
However, aggrieved Wirecard investors should not be unsettled by this ruling. The lawyers from the law firm Schirp & Partner already assumed when the Wirecard scandal became known that a lawsuit against BAFin would have little chance of success. Instead, we recommend that those who are willing to sue assert their claims against Wirecard AG’s long-standing auditor, Ernst & Young (EY).
Injured parties can file individual lawsuits or join the Capital Investor Model Proceedings (KapMuG), which have been opened in the meantime. In such proceedings, the claims of aggrieved investors are bundled and legal disputes are resolved in a single trial with a model plaintiff. The law firm Schirp & Partner represents the largest group of suspended proceedings and has applied to represent the model plaintiff in order to advance the KapMuG proceedings as quickly as possible and in the interests of the aggrieved parties.
We will be happy to register for the model proceedings on your behalf. Further information on the Wirecard scandal and our action against EY can be found here.
“It would have been possible to react differently at that point, and then it would have been uncovered a year and a half earlier.” (more…)
In the insolvency proceedings relating to the assets of Wirecard AG, insolvency administrator Dr. Michael Jaffé has published his fourth status report at the end of 2022.
In it, Mr. Jaffé makes it clear that one of the focal points of the furhter processing of the proceedings will be the (contentious) enforcement of claims against former executive bodies, such as the former Chairman Dr. Markus Braun. However, the enforcement of the claims would involve a great deal of time and effort. The pending legal disputes are likely to take several more years.
In addition, the insolvency administration worked intensively during the audit period on furthe clarification of the facts. Particular focus was placed on the so-called TPA business (third -party business). To this end, the insolvency administrator was able to inspect the account statements of the trust accounts in question and ascertain that the alleged and accounted TPA transaction could never have existed. Dr. Jaffé thus clearly contradicts the account given by former Wirecard CEO Markus Braun, who is currently standing trial before the Munich Regional Court. Braun denies the allegations made against him. Current information on the criminal trail can be found here.
Are shareholders creditors in the ongoing insolvency proceedings?
According to the insolvency administrator, the question of whether (former) shareholders of Wirecard AG are creditors in the insolvency proceedings in the rang of § 38 InsO or not posed a particular challenge. In this regard, the fund company Union investment had initiated declaratory proceedings. On November 23, 2022, the Munich I Regional Court ruled against the former shareholder and dismissed the action. This means that shareholders cannot register their claims as creditors in the rang of § 38 InsO. Thus, the claims can only be serviced after other creditors (e.g. suppliers and lenders) have been satisfied.
However both the insolvency administrator and we at the law firm Schirp & Partner do not expect this ruling to become legally binding. Rather, the Federal Court of Justive will have to rule on this fundamental issue.
Due to the decision of the regional court Munich a statement of the demands of the shareholders to the insolvency table is not possible at present, communicated the insolvency madministrator further. Bondholders are expressly not affected by this decision.
The next review date has been set for October 19, 2023.
All information on the Wirecard scandal and the possible courses of action for aggrieved investors can be found here on our homepage.
In the Wirecard trial, former manager Oliver B. testified against Markus Braun.
The criminal trial against the former CEO of the insolvent payment services provider Wirecard, Markus Braun, will begin on December 8, 2022 before the 4th Grand Criminal Chamber of the Munich Regional Court. The trial will be held in the courtroom of the Munich-Stadelheim correctional facility and will last 100 days until 2024.
In addition to Markus Braun, other defendants include Wirecard’s former chief financial officer, Stephan von Erffa, and Wirecard’s representative in Dubai, Oliver Bellenhaus. They are accused of accounting fraud, market manipulation, embezzlement in several cases and professional gang fraud.
If you would like to have your claims for damages examined free of charge and are interested in taking legal action, you can find all further information on our action against EY here. Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft has audited the annual financial statements of Wirecard AG up to and including 2018 without any objections. The law firm Schirp & Partner is EY’s strongest legal opponent, with over 1,300 lawsuits currently pending.
If you are interested, please register here.
Following the review meeting held on April 7, 2022, the insolvency administrator of Wirecard AG, Dr. Michael Jaffé, has now published a new status report on the insolvency proceedings.
One oft he main topics oft he new report was the liquidation of Wirecard AG’s former subsidiary, Wirecard Bank. According to Mr. Jaffé, the insolvency administrator was able to liquidate almost 227 million euros.l The financial supercisory authority BaFin had initially frozen Wirecard Bank’s money after the scandal became known, but has now released it again.
The insolvency administrator was also able to increase the assets from the liquidation of indirecetly valiable subsidiaries of Wirecard AG.
However the report also shows that despite the secured funds, the claims of creditors and shareholders are likely tob e disproportionately higher. For this reason, the insolvency admistrator is unable to provide any information on the timing and amount of an initial payment on account at this time. Injured investors must continue to be patient.
As in the previous status report the insolvency administrator once again made it clear that the auditing firm EY – against which we are also representing numerous investors in court – continues to refuse any assistance in clarifying the facts oft he case.
To this end, the insolvency administrator has commissioned an external auditing firm to provide an expert opinion on the question of whether EY complied with ist duties in connection with the audits oft he financial statements or whether there were any breaches of duty.
According to Mr. Jaffé, the clarification work in this regard is well advanced, but still not complete.
Back in May 2022, we reported that the Munich I Regional Court had declared Wirecard’s financial statements for 2017 and 2018 null and void based on a lawsuit filed by the insolvnecy administrator.
The lawsuit was based on the alleged fictitious bookings with which managers oft he company are said to have inflated the balance sheets by fictitious amounts in the billions.
According tot he status report, this decision removes the basis for paying dividends to shareholders for the years in question. In his report, however, insolvency administrator Jaffé presented a clawback of dicidend payments as unlikely: „Any clawback of dividends will therefore have no economic significance fort he vast majority of small and private investors.“
In any case, he said, it was questionable whether it could take place at all in the case of very small amounts.
The new review date in the Wirecard AG insolvency proceedings has been set for November 29, 2022.
The decision of the Munich I Regional Court was published in the Federal Gazette on March 16, 2022. (more…)