Shareholders in German fintech Wirecard are taking legal action against Big Four auditor EY in the fallout from the scandal now engulfing the company.
Shareholders in German fintech Wirecard are taking legal action against Big Four auditor EY in the fallout from the scandal now engulfing the company.
Earlier this month, the auditor had refused to sign off the fintech’s 2019 financial report after discovering a shortfall of €1.9 billion (roughly $2.1 billion) on its books.
Following EY’s discovery, German authorities arrested Wirecard’s (now-former) CEO, Markus Braun, who had been at the helm of the fintech for almost two decades.
Braun has been accused of conspiring to inflate the company’s assets and misrepresent what amounted to over 32% of Wirecard’s assets — $2.1 billion of a claimed $6.5 billion.
According to CNBC on June 26, EY said that there are “clear indications that this was an elaborate and sophisticated fraud, involving multiple parties around the world in different institutions, with a deliberate aim of deception.”
The auditor defended its position, claiming that “even the most robust and extended audit procedures” would not be able to derail a “collusive fraud” of this nature.
The German shareholders’ association, Schutzgemeinschaft der Kapitalanleger e. V. (SdK), has nonetheless filed a criminal complaint against three EY auditors — two current and one former — for their alleged role in the accounting scandal.
Crypto debit cards impacted by Wirecard controversy
On June 25, Wirecard filed to open insolvency proceedings. As the extent of the alleged fraud became apparent, regulators moved to suspend its subsidiary, Wirecard Card Solutions Ltd., which is responsible for issuing the firm’s debit cards.
The incident has sparked concern in the cryptocurrency industry, as debit cards from Wirex, TenX and CryptoPay, are among the cards issued by Wirecard.
Following regulators’ action, Crypto.com was asked to cease operations for its EU and U.K. cards, but returned all funds on the affected debit cards to customers’ crypto wallets.
The company is now reportedly working to transfer its card program to a new provider.
from Cointelegraph.com News https://ift.tt/3g90hvW
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