Delaware registered Viceroy Research has once again published an obviously explosive analysis. The group around Fraser Perring is specialized in investigative financial research and was among the first to point out the irregularities in the German Wirecard scandal. Now Viceroy is revealing the irregularities at Grenke, a public-listed German financial services provider. The companies share price has collapsed as a result.
Facilitating binary options scams
The Viceroy Report elaborates over 64 pages in many details the obvious irregularities of public listed German finance group Grenke AG (www.grenke.de and www.grenke.com). Moreover, also the Grenke Bank (www.grenkebank.de) allegedly launders money for scams and cybercrime organizations. Like Wirecard, the Grenke Bank is also said to have laundered money for binary options scams like Blue Trading.
The most glaring example of the complete lack of KYC oversight present at Grenke Bank is its maintenance of bank accounts for numerous unlicensed, unregulated trading platforms, all of which ended up being frauds, and in which retail investors lost all of their investment.
Viceroy Report
In particular, the German FinTech Service GmbH, which until at least Feb 2019 acted as co-operator and payment processor for Blue Trading other binary and forex Scams is said to have laundered the stolen money via Grenke Bank. Although the German regulator BaFin has issued a cease and desist order against FinTech Service GmbH in August 2018, the company continued to launder money via Grenke Bank.
As reported by FinTelegram, FinTech Service changed its name into Alpha Support GmbH, installed a new director, the German Doris Haupt, and continued to work until its liquidation Januar 2020. That’s the way, those illegal services providers and their banks typically work.
EFRI & FinTelegram reports confirmed
Grenke Bank is also included in the FATF report of the European Funds Recovery Initiative (EFRI), co-founded by FinTelegram. This report was submitted to the FATF in July 2020.
The Viceroy Report also states that Grenke‘s leasing model is actually working as a Ponzi scheme that harms small businesses, non-profit institutions, and authorities. Through resellers, Grenke will sell and finance assets at often inflated prices. Thus the entire asset pool of Grenke would be massively overvalued.
In addition, new leasing companies are constantly being set up by Grenke employees as franchise systems which are later bought back at completely unrealistic conditions. These transactions with affiliated companies would not be disclosed and serve for systematic balance sheet manipulation. Perring and his team also claim that the alleged €1 billion cash balance might not exist. Similar to what happened at Wirecard.
The beginning of the end?
After the report was published, the Grenke share price slumped by more than 25% (read also FAZ article). However, this could only be the beginning. It is said that further reports by other media are in progress and will be published soon. The BaFin is probably very busy already in the new Grenke case at the moment. As with Wirecard, the German supervisory authority is said to have looked away for far too long.
