Security & Fraud

Germany’s BaFin Deepens Investigation Into Potential Wirecard Insider Trading

BaFin Deepens Investigation Into Potential Wirecard Insider Trading

BaFin is broadening its probe regarding potential insider Wirecard stock trading to encompass all those who served on the supervisory and management boards of the payment firm this year, Reuters reported, citing a representative for the German financial regulator. BaFin is also eyeing every Wirecard trade during the last couple of months for atypical activity.

On July 12, news surfaced that legislators were asking Angela Merkel, the chancellor of Germany, to unveil transcripts of conversations between Markus Braun, the former Wirecard chief executive, and Jörg Kukies, the deputy finance minister. According to reports, one talk took place between the two individuals on Braun’s 50th birthday in November and an earlier discussion took place in September.

A deputy finance minister, Sarah Ryglewski, reportedly noted in a letter to the finance committee of Parliament that the conversations could not be released as they are classified. For this reason, those who belong to Parliament can just see a recap of the discussions, and its content cannot be made available to the public.

A lawmaker with the Die Linke party, Fabio De Masi, told the Financial Times, “This is just utterly unacceptable.” The legislator noted, “Given the scope and scale of the Wirecard scandal and the regulatory and political failure in handling it, the wider public has a fundamental right to know.”

On July 9, news surfaced that the probe into Wirecard AG had grown to include Ireland. The firm’s facilities in Dublin were reportedly raided by law enforcement at the behest of authorities in Germany.

“Following receipt of a mutual legal assistance treaty from German authorities, the Garda National Economic Crime Bureau (GNECB) began a search under warrant at a financial services provider with a business premises in Dublin city centre today, Thursday, July 9,” the press office for the bureau noted in a statement.

Wirecard, for its part, declared insolvency in June, which is tantamount to a bankruptcy filing in the U.S.

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Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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