Financial service providers: Wild, wilder, Wirecard

This is what winners look like: A company from Aschheim near Munich is securing
      as a payment service provider on the Internet a niche that becomes a global business. And thus
      Turns a start-up into a fintech group with billions in sales. This coup is Wirecard
      succeeded. Since 2015, the value of the share has almost tripled. beginning of the year
      the company even supplanted the Commerzbank from the Dax.

But the image of the dazzling rookie who processes payments on the Internet, provides technology for cashless payments, and owns a bank of his own is damaged. Triggers for this are reports for which there are two possible explanations: either Wirecard is involved in dubious transactions. Or speculators try to manipulate the stock price with bad rumors that they bet on before.

The trigger for the recent unrest around Wirecard were two articles in the business newspaper
Financial Times (FT)
last week. It was about a senior executive of Wirecard in Singaporewhere the head office of the company is located for the Asian market. The employee is suspected of having falsified contracts, and it would be the allegation of money laundering in the room, the
FT.
Shortly thereafter, the paper went down: A law firm had informed the top management on cases of accounting fraud. The stock of Wirecard crashed brutally, recovered to the editorial deadline, but is still at 18 percent in the red. This means that within less than a week, investors have lost around 3.7 billion euros.

Wirecard vehemently denies the allegations. Internal investigations as well as the investigations of an external law firm could not have proven violations. The lawyers are not done with their work yet. Wirecard promises to publicize the results.

Share price Wirecard

Source: Thomson Reuters, as of: 5 February © TIME graphics

There, where one loses, another wins. Crispin Odey, a London hedge fund manager, has been downing Wirecard over the past few weeks. The financial agency Bloomberg estimates that he has achieved a book profit of more than 15 million euros by the fall in price. Businesses such as this called the German authorities on the plan. The Federal Financial Supervisory Authority (Bafin) now does not investigate in the
FT
allegations, as stated on request, but "whether this could have been a possible market manipulation". The unspoken accusation is that speculators like Odey might have known that the
FT
would publish a critical article. Odey did not comment on request. Also the public prosecutor's office Munich determines against unknown because of market manipulation. Wirecard has filed a criminal complaint.

In the environment of Wirecard there are always reproaches. After researching the
        TIME
        In December 2015, the Munich Public Prosecutor's Office searched Wirecard's business premises. The American authorities had asked the German colleagues for assistance – in an investigation into a case of money laundering, Wirecard states on request that there are no proceedings against the company in the US. The US Department of Justice said it did not want to comment.

Public anger was the last in February 2016. At that time, the Internet published the report of a group called Zatarra, whose authors did not identify themselves. They are part of a scene that explores companies, denounces possible irregularities, publishes – and earns money with falling prices. In several reports, they accused Wirecard of earning illegal gambling and money laundering and making dubious acquisitions with dodgy business partners. At that time, the shares lost 26 percent in value as a result of the publications. Investors who had set falling prices earned around 3.2 million euros. Wirecard rejects the allegations as completely insubstantial and untrue and announces that it will take consistent action against attackers to avert damage to the company.

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