Investigation of Wirecard AG

Wirecard AG (WCAGY, WRCDF) Accused of Misleading Shareholders   

Throughout the relevant period Wirecard had represented that its consolidated financials accurately reflected its cash balances and revenue. However, on June 18, 2020, Wirecard revealed that its publication of its annual and consolidated financial statements for 2019 would be delayed and that its auditor believed “spurious balance confirmations” were provided to “create a wrong perception of the existence of such cash balances… for to the benefit of Wirecard group companies.” Then, on June 22, 2020, Wirecard disclosed that there was a “prevailing likelihood that the bank trust account balances in the amount of 1.9 billion EUR do not exist.” Subsequently, on June 23, 2020, CNN reported that Wirecard’s former CEO was arrested for allegedly inflating Wirecard’s financials “through fake transactions in order to make it more attractive to investors and customers.” Finally, on June 24, 2020, Reuters reported that Wirecard was being investigated by the Philippines for its missing $2.1 billion after the Philippine banks supposedly holding the money denied having any ties to Wirecard. Following all of these disclosures, Wirecard’s ADRs plummeted, falling a staggering 98% in its ADS price for both its WCAGY and WRCDF trading tickers.

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