{"id":6203,"date":"2021-05-21T08:14:52","date_gmt":"2021-05-21T12:14:52","guid":{"rendered":"https:\/\/navesinkinternational.com\/?p=6203"},"modified":"2023-12-20T02:53:22","modified_gmt":"2023-12-20T07:53:22","slug":"wirecard-fintech-fraud-and-supervisory-blunder","status":"publish","type":"post","link":"https:\/\/navesinkinternational.com\/2021\/05\/21\/wirecard-fintech-fraud-and-supervisory-blunder\/","title":{"rendered":"Wirecard, fintech fraud and supervisory blunder"},"content":{"rendered":"<p><img fetchpriority=\"high\" decoding=\"async\" class=\"wp-image-6222 alignright size-medium\" src=\"https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/05\/Wirecard-on-the-FT-300x169.jpg\" alt=\"Wirecard - Financial Times\" width=\"300\" height=\"169\" srcset=\"https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/05\/Wirecard-on-the-FT-300x169.jpg 300w, https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/05\/Wirecard-on-the-FT-480x270.jpg 480w, https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/05\/Wirecard-on-the-FT.jpg 700w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><a href=\"https:\/\/www.linkedin.com\/in\/jim-singh\/\" target=\"_blank\" rel=\"noopener\" data-schema-attribute=\"\">Jim Singh<\/a>, am executive committee member of the Alternative Investment Management Association had an interesting <a href=\"https:\/\/www.linkedin.com\/pulse\/fintech-fraud-governance-gaffes-jim-singh\/\" target=\"_blank\" rel=\"noopener\">summary of the Wirecard scandal<\/a>.<\/p>\n<ul>\n<li>The company was a <span style=\"text-decoration: underline;\">credit card payment processor<\/span>, and also the answer to California&#8217;s Silicon Valley.<\/li>\n<li>In June 2020, <span style=\"text-decoration: underline;\">Wirecard was admitted into the Dax, at double of Deutsche Bank&#8217;s valuation<\/span>, before being quickly kicked out, because of a major scandal.<\/li>\n<li>It turns out that <span style=\"text-decoration: underline;\">the company was created by money launderers<\/span> for the purpose of laundering criminal proceeds.<\/li>\n<li><span style=\"text-decoration: underline;\"><img decoding=\"async\" class=\"wp-image-6209 alignleft size-medium\" src=\"https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/05\/Jan-Marsalek-reward-213x300.jpg\" alt=\"Wanted - Jan Marsalek - Munich police\" width=\"213\" height=\"300\" srcset=\"https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/05\/Jan-Marsalek-reward-213x300.jpg 213w, https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/05\/Jan-Marsalek-reward.jpg 300w\" sizes=\"(max-width: 213px) 100vw, 213px\" \/>The company survived for two decades<\/span>. Its admission to the Dax actually demonstrates &#8220;The abject failure of Wirecard\u2019s auditors and the German regulators to do one thing: their jobs.&#8221;<\/li>\n<li>In 2002, <span style=\"text-decoration: underline;\">Germany created BaFin, a regulator to monitor financial frauds<\/span>, in the wake of the Enron Scandal, but <span style=\"text-decoration: underline;\">allocated only \u20ac6 m as a budget<\/span>, enough for 14 employees.<\/li>\n<li>When financial analysts (short sellers) reported to BaFin the likely wrongdoing of Wirecard, <span style=\"text-decoration: underline;\">the regulator actually turned against the whistleblowers and opened investigations into market manipulations<\/span>.<\/li>\n<li>BaFin also defended Porsche and Volkswagen in their own respective scandals.<\/li>\n<li><span style=\"text-decoration: underline;\">Wirecard&#8217; auditors &#8211; EY no less &#8211; never detected any malfeasance, for decades.<\/span><\/li>\n<li><span style=\"text-decoration: underline;\">The non-exec directors of the board never saw any malfeasance either<\/span>.<\/li>\n<li>The story only came to light because i<span style=\"text-decoration: underline;\">nvestigative journalists<\/span> <a href=\"https:\/\/www.ft.com\/content\/745e34a1-0ca7-432c-b062-950c20e41f03\" target=\"_blank\" rel=\"noopener\">came out with the research<\/a> (below) to confirm the malfeasance. The story is worth of the best spy novels &#8211; expensive attorneys, Russian connections, slush funds, fake surveillance stories, threats and many other treats.<\/li>\n<\/ul>\n<p><a href=\"https:\/\/www.ft.com\/content\/19c6be2a-ee67-11e9-bfa4-b25f11f42901\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"wp-image-6208 aligncenter size-full\" src=\"https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/05\/FT-WireCard-cover-stories-small.jpg\" alt=\"Ft's WireCard cover stories\" width=\"650\" height=\"343\" srcset=\"https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/05\/FT-WireCard-cover-stories-small.jpg 650w, https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/05\/FT-WireCard-cover-stories-small-300x158.jpg 300w, https:\/\/navesinkinternational.com\/wp-content\/uploads\/2021\/05\/FT-WireCard-cover-stories-small-480x253.jpg 480w\" sizes=\"(max-width: 650px) 100vw, 650px\" \/><\/a><\/p>\n<ul>\n<li>Worse, the <span style=\"text-decoration: underline;\">BaFin regulators have survived the scandal and kept their jobs<\/span>.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>Fraudulent executives proceedings in their crime for years, retaliating against whistleblowers, with the support of the regulator, in a major developed country. <span style=\"text-decoration: underline;\">What worse could you imagine?<\/span><\/p>\n<p><span style=\"text-decoration: underline;\">That it happens also here<\/span>. It would never happen, right? Your thoughts?<\/p>\n<p>&nbsp;<\/p>\n<p><iframe style=\"background: white;\" src=\"https:\/\/www.ft.com\/content\/745e34a1-0ca7-432c-b062-950c20e41f03\" width=\"100%\" height=\"650\"><\/iframe><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The credit card processor was actually a purpose-built money laundering scheme.<br \/>\nWirecard tricked its auditors, its board, external investigators. It retaliated against whistleblowers. With the support of its regulator.<br \/>\nThat wouldn&#8217;t happen over here, but could it? Thoughts?<\/p>\n","protected":false},"author":1,"featured_media":6222,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[11,13],"tags":[220,157,221,217,185,222,103,219,218],"acf":[],"_links":{"self":[{"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/posts\/6203"}],"collection":[{"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/comments?post=6203"}],"version-history":[{"count":1,"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/posts\/6203\/revisions"}],"predecessor-version":[{"id":13033,"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/posts\/6203\/revisions\/13033"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/media\/6222"}],"wp:attachment":[{"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/media?parent=6203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/categories?post=6203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/navesinkinternational.com\/wp-json\/wp\/v2\/tags?post=6203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}