The German watchdog took action in the Wirecard case. It was about time and hence it didn’t really come as a surprise when Munich law enforcement agents had the offices of Wirecard‘s headquarters searched last Friday. Previously, BaFin had filed a criminal complaint against Wirecard on suspicion of market manipulation. The investigations by the public prosecutor’s office are allegedly directed primarily against Wirecard CEO Markus Braun and his fellow board members. It currently looks as if Braun’s time as CEO will soon be over.
Suspicious directors
In a statement on Friday, Munich prosecutors said that this law enforcement action followed the criminal complaint filed a few days earlier by BaFin. The suspicion is based on the fact that those responsible at Wirecard may have given misleading signals regarding the stock market price of Wirecard shares through the ad hoc announcements of March 12, 2020, and April 22, 2020, explained a spokeswoman of the criminal prosecution authorities in a written statement. Hence, the Munich Public Prosecutor’s Office I initiated proceedings against Markus Braun and his three fellow directors.
German regulator under pressure
BaFin had come under massive pressure in recent weeks because it was accused of being too lenient with Wirecard. In other cases of scams and investor fraud, too, BaFin would be far too little active, according to criticism in Germany. As a matter of fact, BaFin issues relatively few investor warnings compared to FCA in the UK, the CONSOB in Italy, or CNMV in Spain. With the complaint against Wirecard, some pressure has now been taken off the increasing criticism.
Looking for a new CEO?
The share lost more than ten percent after the news was announced in Frankfurt late trading.
the company further explained that the investigations were not directed against the company, but rather against the members of its Executive Board. The company was cooperating “fully” with the investigating authorities.
Things will probably be very tight for the much-disputed Wirecard CEO Markus Braun. Meanwhile, the sentiment in social media and online forums also seems to be tilting against him. In an article in the influential German media outlet FAZ, Markus Theurer concluded that it’s about time for Braun to depart.
The problem here is that many people cannot imagine Wirecard without Braun at present. But this is exactly the situation that may soon arise. Potential successors for Braun are probably already being sought.
