Security & Fraud

Wirecard Shares Plummet After New Round Of Allegations

Wirecard Shares

Wirecard’s shares fell 28 percent on Friday (Feb. 1) after a report in the Financial Times alleged that a law firm hired by the payments company found evidence of “serious offenses of forgery and/or of falsification of accounts” at Wirecard’s Singapore office.

The price fall wiped out $5.7 billion from the company’s market value.

According to the publication, a preliminary report by the law firm was presented to senior Wirecard management on May 8, 2018. “On the face of the evidence uncovered so far, these acts appear to bear out at the very least serious offences of forgery and/or of falsification of accounts/documents under section 477A of Singapore’s Penal Code,” the report stated. “As these acts were intentional, there are reasons to suspect that they may have been carried out to conceal other misdeeds, such as cheating, criminal breach of trust, corruption and/or money laundering.”

But Wirecard issued a statement dismissing the story as “inaccurate, misleading and defamatory,” according to Reuters.

“Rajah & Tann Singapore LLP is one of Wirecard’s many legal advisers and regularly conducts compliance and governance related advisory work for Wirecard,” the statement continued. “It is untrue that Rajah & Tann Singapore LLP has ever uncovered any findings of material misconduct of any Wirecard employee in matters of accounting practices. No presentation was held to Wirecard’s senior management on May 8, 2018, on the alleged matter.”

Representatives of Rajah & Tann could not be reached for comment.

In the meantime, BaFin, the German regulator, announced on Thursday (Jan. 31) that it has opened a preliminary investigation into possible market manipulation after another FT report led to a drop in Wirecard’s share price. In its statement, BaFin cited Article 12 of the EU market abuse regulation, which prohibits the distribution of “information through the media, including the internet, or by any other means, which gives, or is likely to give, false or misleading signals as to the … price of a financial instrument.”

And although the criminal prosecution office in Munich is not launching a criminal investigation since the transactions happened outside country’s jurisdiction, the prosecutors’ office has started a preliminary investigation into possible market abuse regarding the fall in Wirecard’s share price.


Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.


To Top