Auditing - Wirecard balance sheet auditor sued for damages
The Deutsche Schutzvereinigung für Wertpapierbesitz(DSW) has filed a claim for damages against the auditor EY on behalf of more than 13,000 Wirecard investors. The lawsuit, which is 80,000 pages long with attachments, has been filed with the Munich Regional Court, DSW announced in Düsseldorf. Institutional and private investors are demanding more than 700 million euros from EY. The costs of the lawsuit would be borne by British litigation financiers, who would receive part of the money claimed in the event of success.
The payment service provider Wirecard, which was listed on the DAX at the time, collapsed in 2020 after 1.9 billion euros allegedly held in escrow accounts could not be traced. A test case brought by aggrieved shareholders before the Bavarian Supreme Court is intended to clarify key issues and, with its ruling, provide guidance for further proceedings. The defendants include former Wirecard managers and the auditing firm EY, which had audited the balance sheets for years. Former CEO Markus Braun, who is accused of fraud, has been on trial in Munich for a year.
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- The German association for the protection of securities ownership (DSW) is taking legal action against EY, the auditor for Wirecard's balance sheets, seeking 'Action for damages' worth over 700 million euros.
- This lawsuit, citing negligence in audit proceedings, has been filed with the Munich Regional Court in Düsseldorf, with over 13,000 Wirecard investors as claimants.
- The case, spanning over 80,000 pages with attachments, involves British litigation financiers who would shoulder the lawsuit costs in exchange for a portion of potential damages.
- In the aftermath of Wirecard's 2020 collapse, where allegedly 1.9 billion euros in escrow funds were unaccounted for, various processes, including a test case, are underway to clarify key financial aspects.
- In the trial, former CEO Markus Braun, accused of fraud, faces charges in Munich, while the auditing firm EY, also a defendant, stands accused of negligence in balance sheet audits.
- Some prominent German banks and investors have followed the trail of events closely, as they too were affected by the wirecard disaster and are potentially impacted by the outcome of this 'Action for damages'.
- As the case progresses and the Munich Regional Court delivers its verdict, it could set precedents for future auditing and financial accountability standards within Germany and beyond.
- Amidst this high-stakes saga, security remains a top priority for financial institutions, investors, and regulators alike, as the case demonstrates the potential far-reaching consequences of lapses in financial oversight.
- Repercussions from this 'Action for damages' could resonate throughout the German financial landscape and beyond, instilling a renewed sense of vigilance and commitment to integrity in the wake of the Wirecard affair.
Source: www.stern.de
