Legal

Germany Ends Probe Into Wirecard Accusations Of Journalists

A Munich prosecutor won't be going forward with a case against two Financial Times (FT) journalists for alleged market manipulation resulting from their 2019 reports in the case against disgraced German payments processor Wirecard, FT reported.

Journalists Dan McCrum and Stefania Palma were targeted by a criminal complaint filed by watchdog BaFin in April 2019. FT had published reports about Wirecard's alleged use of forged and back-dated contracts that raised questions about the company's accounting. That coincided with a drop in Wirecard's shares, which caused the company to claim it had been the victim of market manipulation.

The investigation into the reports, involving accounting irregularities at Wirecard, ultimately didn't do anything to support the suspicions of BaFin.

BaFin had "no objection" to dropping that investigation, although another complaint against short-sellers alleging market manipulation is still active, FT reported.

The collapse of Wirecard, beginning with its admission of a missing $2 billion earlier this year, has had a worldwide fallout with numerous arrests of its top officers like CEO Markus Braun. Jan Marsalek, the company's former chief operating officer, is still on the run, according to FT.

The scope has also widened to include regulators, including BaFin, that reportedly knew of Wirecard's suspicious accounting practices for years and didn't take action.

BaFin head Felix Hufeld has faced calls to resign, although he has remained steadfast and not done so yet. He said he plans to remain in his position as long as people still have trust in him.

But the agency has faced criticisms related to Wirecard before. Last year, the watchdog temporarily banned investors from betting against Wirecard shares, which was the first time that had happened in Germany's history.

In addition, BaFin has also disclosed that its staff had been trading Wirecard shares before the company went insolvent earlier this year. That, FT reported, raised questions about conflicts of interest.

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