Wirecard is under investigation for insider trading and other nefarious acts of fiscal regulatory non-compliance. Know if Surveillance Tools have Predicted Wirecard’s Demise at https://bit.ly/2KNWkTe

1. Could Surveillance Tools have
Predicted Wirecard’s Demise?
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2. 02
Introduction
That’s a question that deserves
looking into a little further. First, to
establish some context, Wirecard AG
was a German FinTech darling
innovating financial payment and
processing along with related
services. The keyword here is “was,”
as in past-tense and no longer “is.” In
September 2018, their valuation
approached €25 Billion. Less than 18
months later, they lost 98% of their
value and are now defunct.

3. According to Bloomberg and numerous reputable media sources,
Wirecard is under investigation for insider trading and other nefarious acts
of fiscal regulatory non-compliance. And it’s unclear how many others
have profited by placing short positions to bet against the stock. On June
10, 2020, eight days before Wirecard’s stock crashed, an anonymous
tipster posted in an online forum that an EY auditor couldn’t account for
missing funds; more specifically, missing billions. Both the German media
outlet Handelsblatt, and BaFin, a German regulatory watchdog, have
confirmed that the now-deleted post was legitimate.
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4. Sophisticated eComms monitoring solutions are
necessary to interpret nuance, emojis and the like
from conversations, but close scrutiny by watchdogs
also proves to be effective. In essence, that’s what
Compliance Officers do. However, at least in the case
of Wirecard, a savvy blogger (memyselfandi007) has
been hot on the tail of the fraudsters – back since
2008 when the company launched. Posts by this
blogger regarding Wirecard have been viewed more
than 18 million times.
THERE ARE ALWAYS
SIGNS
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So, the question becomes, could eComms surveillance tools have predicted the fallen
FinTech giant’s demise and alerted authorities in time to freeze its assets?

5. Here’s where it gets really interesting. The blogger’s posts have been heavily redacted and, in
some cases, removed; not by the blogger, but by Wirecard. The fallen FinTech also filed
numerous lawsuits against this blogger in the years leading up to the current debacle. Did BaFin,
the EBA, SEC and other regulatory agencies miss this – or dismiss it?
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The Financial Times reported an elaborate “book-cooking scheme” of an Asian-Pacific accounting
firm with Wirecard as one of its clients back in February 2019. Shortly after the whistle-blowers
went public, the Singapore Police raided Wirecard’s local office. The German Minister of Finance
sounded the alarm to the German Chancellery in August 2019 but it’s unclear if or how that
warning was acted upon. Apparently, we’re not the only ones asking this question as The Grand
Coalition is now actively in pursuit of the truth.

6. THE AFTERMATH OF ALLEGED MARKET
ABUSE
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Alleged market abuse is the key descriptor here. Even so, suspicions of market abuse don’t pass
without making a few ripples. In the case of Wirecard, which has unceremoniously been dubbed,
“The German Enron,” it’s not a matter of ripples – it’s a matter of waves.
Marcus Braun, former CEO, resigned in shame and has stated that he and Wirecard are victims of
fraud. Jan Marsalek, a former Board member of Wirecard, has fled Germany, likely with his solid
gold credit card for which he was renowned. He was spotted in the Philippines and then in China.
Some reports indicate that he is currently in Moscow whereas other reports cite that he is under the
watchful eye of Russia’s military secret service, the GRU. Why did he flee, and can the regulatory
authorities gain access to the eComms of these former leaders whose behaviors are now suspect?

7. The suspected scheme isn’t very elegant, but
effectiveness and elegance aren’t always
linearly equated. A 33-year old Indonesian
accountant operated a firm in Singapore and
had notable clients like Wirecard. He managed
only a handful of employees but, according to
testimony that has since emerged, he artfully
taught them how to “cook the books.” The
practice is called “round-tripping” which
involves moving a lump sum of cash from the
German bank owned by Wirecard to a dormant
subsidiary in Hong Kong.
HOW DID WIRECARD
‘COOK THE BOOKS?’
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8. Apparently, the practice had been ongoing for years
(potentially more than a decade) and Wirecard’s
treasurer and head of accounting supposedly knew
about it. BaFin and Wirecard were known to each
other: previously, BaFin launched investigations into
suspected market abuse by Wirecard in 2008, 2015
and in 2016. The 2019 investigation revealed
bombshells like “forgery,” “falsification of accounts,”
“cheating,” “criminal breach” and “money laundering.”
Wirecard was paying Right Momentum Consulting
millions of Euros each year and sending the money to
an address in Kuala Lumpur which could not be
traced. Marsalek was appointed to an accounting
practices review committee commissioned internally
by Wirecard’s CFO in a classic, “fox-watching-the-
henhouse” scenario.
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