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Wirecard Shareholders Taking Legal Action Against Big Four Auditor EY For Alleged Role In Scandal

  • Shareholders in German fintech Wirecard have filed a criminal complaint against Big Four auditor EY for its alleged role in the scandal that has now left a stain on the company.
  • Earlier in June, the auditor refused to sign off Wirecard’s 2019 financial report after discovering a shortfall of €1.9 billion (equivalent to $2.1 billion) on its books. 
  • That prompted German authorities to arrest Wirecard’s former CEO, Markus Braun, who had been at the helm of the fintech for nearly two decades. 
  • Braun was accused of conspiring to inflate the company’s assets and misrepresent what amounted to over 32% of Wirecard’s assets — $2.1 billion of a claimed $6.5 billion.
  • The auditor defended its position, claiming that “even the most robust and extended audit procedures” would not be able to derail a “collusive fraud” of this nature.
  • Wirecard has since filed to open insolvency proceedings. Regulators moved to suspend its subsidiary, Wirecard Card Solutions Ltd., which was responsible for issuing the firm’s debit cards.
  • As a result, Crypto.com was asked to cease operations for its EU and U.K. cards, but returned all funds on the affected debit cards to customers’ crypto wallets.
  • Read the full story here.

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