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FT report on Wirecard fraud catches eye of BaFin…for market manipulation

The Financial Times report that alleged wrongdoings at Wirecard is no reason to launch a criminal probe, according German financial regulator BaFin.


FT report on Wirecard fraud catches eye of BaFin

The FT reported on Wednesday that a senior Wirecard executive based in Singapore had been suspected of using forged and backdated contracts in a string of suspicious transactions, citing an internal presentation and other documents.

The prosecutor’s office in Munich said that Wirecard had contacted the authorities after the FT report, which caused the company’s share price to drop by up to 25% on Wednesday.

In a statement published on Wirecard’s website on Thursday, the company called the report “inaccurate, misleading and defamatory”.

The group, which since 2018 has been a member of the Dax index of Germany’s 30 largest listed companies, denied any wrongdoing and stressed it “takes all compliance and regulatory obligations extremely seriously”. The corporate statement said that “it is clear” that the FT report was based on “misinformation” and added that “before the publication of the article there had been increased short activities on the capital market side”.

In a statement released on Thursday, BaFin said it would investigate “if yesterday’s event constitutes potential market manipulation”, pointing to article 12 of the EU market abuse regulation. That article prohibits the dissemination 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” – according to the FT.

A spokeswoman for Wirecard said that the company welcomed the investigation into potential market abuse.  The criminal prosecution office in Munich said that it saw no reason to launch a criminal probe regarding potential accounting irregularities at Wirecard, as the events described in the Financial Times article all happened outside Germany’s jurisdiction.

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