We are investigating Wirecard AG (WCAGY; WRCDF) (“Wirecard” or the “Company”) for potential violations of the federal securities laws.
On June 18, 2020, Wirecard issued a press release entitled “Wirecard AG: Date for publication of annual and consolidated financial statements 2019 delayed due to indications of presentation of spurious balance confirmations” in which the Company announced, in pertinent part, that “no sufficient audit evidence could be obtained so far of cash balances on trust accounts to be consolidated in the consolidated financial statements in the amount of EUR 1.9 billion (approximately a quarter of the consolidated balance sheet total).” Then, on June 22, 2020, Wirecard issued a press release entitled “Wirecard AG: Statement of the Management Board about the current situation of the Company” which stated, in relevant part, that “there is a prevailing likelihood that the bank trust account balances in the amount of 1.9 billion EUR do not exist.” On June 23, 2020, CNN reported that Markus Braun, Wirecard’s former Chief Executive Officer (“CEO”), was arrested “after a $2.1 billion hole exploded in [Wirecard’s] accounts.” The article stated that “Munich prosecutors confirmed that Braun, Wirecard’s former CEO, was arrested on suspicion of having inflated the digital payment company’s balance sheet and sales through fake transactions in order to make it more attractive to investors and customers.” Finally, on June 24, 2020, Reuters reported that “Wirecard’s missing $2.1 billion is being investigated by the Philippines,” following reports that the Philippine banks the Company claimed held the cash in question “have denied any links with [Wirecard],” and that Jan Marsalek, Wirecard’s former Chief Operating Officer, had fled to the country. On each of the foregoing disclosures, the value of Wirecard’s American depositary receipts fell sharply, damaging investors.