Wirecard AG, a fintech company founded in 1999 in Munich, Germany, as a payment processor for online gambling and adult content, rose to become a DAX 30 blue-chip firm valued at over €24 billion by 2018. However, it collapsed in 2020 amid revelations of massive accounting fraud: for years, executives had misled investors and auditors by fabricating cash balances (estimated at €1.9 billion) through fictitious escrow accounts in the Philippines and other Asian entities. The scandal, Germany’s largest postwar financial fraud, exposed regulatory lapses, aggressive short-selling disputes, and a culture of denial at the company.
Starting in June 2008, there were public accusations of accounting falsification in 2007 by the German shareholder group SdK. In 2015, the Financial Times (FT) published initial investigative reports questioning Wirecard’s Asian operations and revenue claims, sparking years of denials and lawsuits from the company against journalists. In March 2018, Wirecard’s Singapore office launched an internal probe following a whistleblower report on suspicious money flows, but the investigation was later quashed.
On June 18, 2020, under pressure from further FT reports, Wirecard admitted that the auditors could not verify €1.9 billion in Asian assets, causing the value of the company’s shares to plummet 99% in just a few days.
The following day, June 19, CEO Markus Braun resigned and was arrested the next day on suspicion of false accounting and market manipulation. On June 25, Wirecard filed for insolvency, marking its official collapse. In July, the German regulator, BaFin, banned short selling on Wirecard shares and a parliamentary inquiry was set up to probe the regulatory failures.
The scandal triggered extensive criminal and civil proceedings, with ongoing trials and rulings as of the time of writing (February 2026).
Key developments include:
- December 8, 2022: Criminal trial begins in Munich against chief executive officer Markus Braun, former chief operating officer Jan Marsalek (a fugitive since 2020), and four other executives on charges of fraud, false accounting, and breach of trust; the case involves over 1,000 witnesses.
- September 23, 2024: The Higher Regional Court of Munich (OLG München) ruled that shareholders’ damages claims rank equally (pari passu) with those of unsecured creditors such as bondholders.
- December 14, 2024: The Munich Regional Court extended the main fraud trial to December 31, 2025 (entering its third year), with no verdict date set.
- January 3, 2025: The Munich Regional Court holds former board members liable for €140 million in damages plus interest to the insolvency estate.
- February 28, 2025: The Bavarian Higher Regional Court (BayObLG) ruled EY (Wirecard’s auditor) not liable for shareholder damages, as its audit reports didn’t constitute “public capital market information.”
- April 16, 2025: BayObLG excludes EY from ongoing model proceedings for investor claims, though individual lawsuits remain possible.
- October 16, 2025: Investors who suffered major losses appealed to Germany’s Federal Court of Justice for clarity on payout priorities in the insolvency.
The fallout has also spurred regulatory reforms in Germany, including stricter auditor oversight and BaFin restructuring. Braun remains in custody awaiting the trial outcome, while Marsalek faces international arrest warrants for his alleged ties to espionage rings.
Sources:
McCrum, Dan (2019), “Wirecard: Inside an Accounting Scandal,” Financial Times, February 7: https://www.ft.com/content/d51a012e-1d6f-11e9-b126-46fc3ad87c65
McCrum, Dan (2019), “Wirecard Relied on Three Opaque Partners for Almost All Its Profit,” Financial Times, April 25: https://www.ft.com/content/a7b43142-6675-11e9-9adc-98bf1d35a056
McCrum, Dan (2019), “Wirecard’s Suspect Accounting Practices Revealed,” Financial Times, October 15: https://www.ft.com/content/19c6be2a-ee67-11e9-bfa4-b25f11f42901
McCrum, Dan, & Storbeck, Olaf (2020), “Wirecard Collapses into Insolvency,” Financial Times, June 25: https://www.ft.com/content/ac949729-6167-4b6c-ac3f-f0aa71aca193