Wirecard's collapse

Wirecard had grown into one of Germany's most prominent financial-technology successes, processing electronic payments for merchants worldwide and briefly reaching a stock-market value exceeding some of the country's largest traditional banks. The Financial Times published the first detailed allegations of accounting irregularities at the company in early 2019, based partly on internal whistleblower accounts, but Wirecard denied wrongdoing and Germany's financial regulator BaFin took the unusual step of temporarily banning short-selling of Wirecard shares rather than investigating the claims. The company's defenses collapsed in June 2020 when its own auditors could not confirm that roughly €1.9 billion supposedly held in trustee bank accounts in the Philippines, representing a large share of Wirecard's reported assets, actually existed. Wirecard filed for insolvency days later, and former chief executive Markus Braun was arrested, while another top executive fled and remains a fugitive. The scandal exposed serious failures by BaFin and Wirecard's own auditor, and prompted Germany to pass new financial-market oversight legislation in 2021 aimed at strengthening corporate-fraud detection.