back to article Fintech biz Wirecard folds into insolvency like two pair against a flush. Good luck accessing your chip stack

German electronic payment whizzkids Wirecard AG has filed for bankruptcy, three days after the arrest of ex-CEO Markus Braun on fraud charges – and the company's admission that €1.9bn in assets ($2.1bn) were missing and may never have existed. "The management board of Wirecard AG has decided today to file an application for …

  1. chivo243 Silver badge
    Facepalm

    Not under the sofa

    $2B is a hard pill to swallow, let alone one pill to fake. I would hate to work in the accounting department about now...

    1. Anonymous Coward
      Anonymous Coward

      He could hardly be acting alone

      "Friday said it had filed a criminal complaint against a former Ernst & Young GmbH auditor, Andreas Loetscher, now chief accounting officer at Deutsche Bank AG"

      Then this was very handy timing:

      https://twitter.com/ScottMStedman/status/1274151535887310855

      It's difficult to believe that only one person in the company would be aware that the numbers were not real.

      1. My other car is also a Trabant.

        Re: He could hardly be acting alone

        Deutsche Bank has also had a few problems, such as bailing out Trump.

      2. DavCrav Silver badge

        Re: He could hardly be acting alone

        "It's difficult to believe that only one person in the company would be aware that the numbers were not real."

        According to reports, this was 'well known'. Short-sellers have been giving WireCard a kicking over their accounts, and there were complaints to the German version of the FCA over their conduct. The FCA's response? Ban short selling in WireCard.

        The German financial scene was so happy to have a darling that they didn't want to look too closely.

      3. LucreLout Silver badge

        Re: He could hardly be acting alone

        It's difficult to believe that only one person in the company would be aware that the numbers were not real.

        Indeed. The level of outright fraud here requires a massive degree of complicity on behalf of the staff, or career ending ignorance on a gross misconduct scale on the part of those same staff.

        Its much like your Mrs deciding you're going to live the lifestyle of the Rooney's, only without any actual income to support it - you'd probably reasonably notice your position wasn't backed up by anything real, right?

        1. Jellied Eel Silver badge

          Re: He could hardly be acting alone

          Indeed. The level of outright fraud here requires a massive degree of complicity on behalf of the staff, or career ending ignorance on a gross misconduct scale on the part of those same staff.

          I'm not so sure.. Wirecard seems like a web of companies, so most complicit would be the CFO and Treasurer of the parent. They're the ones who would (or should) have a true picture of consolidated and subsidiary accounts. Or perhaps not, ie the comment that the auditors hadn't seen bank statements for the previous 4 years, yet still signed off the accounts. It's kind of hard to reconcile how they could do that without reconciling the accounts.

  2. Throatwarbler Mangrove Silver badge
    Facepalm

    That's a shame

    All those people out their Dunning-Krugerrands. I'm feeling an emotion . . . a guilty pleasure at the misfortune of others. I feel like there ought to be a word in German for it, but I can't quite put my finger on it.

    1. Strahd Ivarius Bronze badge

      Re: That's a shame

      That would be "Shadenfreude" if I am not mistaken.

      1. Simian Surprise

        Re: That's a shame

        Unfortunately, it's "schadenfreude".

        1. DavCrav Silver badge

          Re: That's a shame

          "Unfortunately, it's "schadenfreude"."

          I bet you enjoyed their getting the spelling wrong, didn't you?

          1. Cynic_999 Silver badge

            Re: That's a shame

            Epicaricacy is a perfectly acceptable English word. No need to use foreign words!

            1. Throatwarbler Mangrove Silver badge
              Headmaster

              Re: That's a shame

              Wiktionary indicates 'The word is mentioned in some early dictionaries, but there is little or no evidence of actual usage until it was picked up by various "interesting word" websites around the turn of the twenty-first century.' I would argue that schadenfreude actually has more common usage in English.

              Also, I would then have lost the ability to make a "there's a word for it in German" joke about a failing German company and . . . look, if I have to explain the joke, it's not funny. So there.

  3. cantankerous swineherd Silver badge

    this is nasty, electronic money accounts aren't covered by the compensation scheme that applies to real banks.

    1. Skoorb

      I agree. Currently, organisations with full fat banking licences or the equivalent (banks, building societies and maybe a credit union or two) display a discreet FSCS logo.

      I think that the regulations need to be changed so that any institution without FSCS coverage should be forced to display a large warning as part of each account opening process, that you have to specifically and separately accept, making clear that they don't have full regulatory supervision, don't have compensation available in the event of their insolvency, and if you want this FSCS coverage you should stop and go to a real bank/building society.

      Loads of people quoted by various media outlets who have been locked out of their money don't seem to know:

      - that they didn't have FSCS coverage, and in many cases

      - that the FSCS exists and would cover them if they went with a "real" bank.

      1. mark l 2 Silver badge

        Good idea in theory, but no doubt they would just have pages of legal jargon that people would just click YES on like they do on EULA already.

        Better option is to make it a legal requirement that they must get full banking licenses and therefore be covered under the FSCS if they want to open such services.

        1. hoola Bronze badge

          This is brewing up into the Iceland banking fiasco where the Internet, Google and perceived better returns meant people put their money in with no understanding that it was not protected.

          Also, given that this appears to have then been used as a rebranded service for other cash cards further increases the complexities of ownership, liability and compensation.

          1. horse of a different color

            Speaking as a saver who was affected, Icelandic banks did have regulatory protection (by the Icelandic government), and even argued that the protection was superior to that offered by the FCA and other European regulators. The issue was that the Icelandic government refused to honour those protections, except to Icelandic citizens. I have some sympathy for the Icelandic government’s position, as I suspect the liabilities were larger than they were able to cover. It’s misleading to suggest that savers were putting money in savings accounts with no protection.

            1. LucreLout Silver badge

              I have some sympathy for the Icelandic government’s position, as I suspect the liabilities were larger than they were able to cover.

              That being the case they shouldn't have allowed their banking sector to grow so big, and I say that as one who works in the City. There's no requirement to have an open ended balance sheet, and the Icelandic government could readily have bought protection for themselves in the form of a CDS or other such instrument.

              You can't take the profits then run from the losses while allowing your own citizens to effectively draw out other countries money, which is what Iceland and IceSave did. I have no sympathy for the Icelandic government because the situation was played for and got, and they deserve to continue paying the higher price for their bonds than they would otherwise have done had they not defaulted on their obligations.

        2. Anonymous Coward
          Anonymous Coward

          re. they must get full banking licenses

          but... but I was told they're good for me?! I was told they're "disruptive!", "innovative!", "breakthrough!", "cool!", "uber-fin-techish!", "future of banking!". And... they have been audited by the ultimate cool in reputable auditing, Ernst & Young! HOW COULD THIS HAPPEN?!

    2. Pascal Monett Silver badge

      Yup. Looks like sticking it to the man can come with some risk, even in Europe.

      That said, the scum is headquartered in Germany. Not a good place to be scum. They are going to feel the heat.

      1. anothercynic Silver badge

        Specifically, Bavaria... Munich will draw and quarter them.

        1. Anonymous Coward
          Anonymous Coward

          "Specifically, Bavaria... Munich will draw and quarter them."

          Hell yeah, had a client in Munich who had an audit, turned out they had overpaid the German equivelent of VAT to the tune of €70,000, got told they couldn't have a refund and then a month later they got slapped with a €10,000 fine for failing to account for the tax properly!

    3. daalmo

      Electronic money accounts are protected...differently

      Electronic money accounts are not covered by FCSC because this is supposed to be unecessary. FinTechs like PockIt, Curve and TransferWise are legally required to deposit your real money with a third party bank. The App then creates digital money pegged 1:1 and conversion takes place only during deposit or withdrawal from the App ecosystem. Thus your money is safe as long as the bank (not the FinTech) is safe.

      However, in this case the bank was a subsidiary of Wirecard...

      1. Greybearded old scrote

        Re: Electronic money accounts are protected...differently

        Pockit are saying my money is in Barclays, so I should get it back. Eventually.

        1. Anonymous Coward
          Anonymous Coward

          Re: Electronic money accounts are protected...differently

          I have a pockit card that I use just as a backup that I top up with a small amount each month via a standing order. The email I received says the money is in "a ring-fenced designated client account with Barclays" which is reassuring. I feel sorry for the folk who use their card as their main bank account.

  4. Michael Hoffmann

    Where were the auditors?

    The article mentions E&Y and the consequences they may face briefly, but the German FAZ states that it may go beyond and this could be for E&Y what Enron was for Arthur Anderson. Somebody may want to raid their offices and confiscate all the document shredders - and backup tapes.

    1. Tom Chiverton 1

      Re: Where were the auditors?

      I'm sure by now all the hard drives have had mysterious synchro failures, and shortly they'll be a fire in one section of the paper records store

    2. John Smith 19 Gold badge
      Coat

      "for E&Y what Enron was for Arthur Anderson"

      Funny you should say that.

      Because E&Y bought up 60% of AA's business when their role in Enron came out.

      AA seems to have the "Auditor that likes to say 'Yes'" "

      Now for legal reasons I'm not saying E&Y has inherited that title but it does look a tad concerning.

      1. Warm Braw Silver badge

        Re: "for E&Y what Enron was for Arthur Anderson"

        it does look a tad concerning

        There's a small number of huge auditing firms competing for the same business. It's been known for decades that the symbiotic relationship between the huge auditing firms and their huge clients is not optimal for financial transparency. However, it's a nettle noone seems willing to grasp.

    3. W.S.Gosset Silver badge

      Re: Where were the auditors?

      General Safety Tip:

      NEVER use a Big5 accounting firm for anything.

      A/ third-rate skills/service

      B/ violent fees

      A Big5 audit essentially doesn't happen. It is at best a box ticking exercise, and is increasingly focussed, believe it or not, on whether your policy/procedure documents look good. You are merely paying face money as part of being seen to have fulfilled a legal requirement with a "quality firm".

      Always use a 2nd or 3rd Tier firm.

      1. Chinashaw

        Re: Where were the auditors?

        The problem is as much with insurance and cost. There are very, very few to none, tier 2 audit firms that have the resources, cash and insurance to audit large - massive businesses. And absolutely zero Tier 3 firms who can audit any large company.

        As for the 'essentially doesn't happen' the polite term for is 'utter bollocks' far more firms are audited and correctly pass (as per the law) than fail, fail to be found out. All that happens is that every time an audit fails and it is because the auditor has been duped by the client (failed to do their job etc.) is a lot of people jump up and down and talk about always using a tier 2/3 audit firm.

        And if we are talking fee's and costs, if you want a forensic level investigation, checking every document and back tracking all transactions (I agree EY in this instance are massively on the hook) it is going to cost the firm an arm and a leg, whether you use a Tier 1,2,3,4 or bob's own company. Then how long do you give the auditors to work on the files, find them, publish and also let you carry out your business? Throw in international contracts and multiple legal and accounting jurisdictions and your standard Tier 2 or 3 firm will not be able to do the audit.

        1. W.S.Gosset Silver badge

          Re: Where were the auditors?

          First off: thumbs-up for actually knowing what you're talking about.

          Secondly: but...

          Your final point meta-states you haven't formally trained as an auditor. I have (odd CV). Whoopdedoo but point is there are 2 principal types of audit: compliance and substantive; and you are here (ie, your final point) talking about Substantive Audits. These are exceedingly rare, for exactly the reasons you point out. In essence: $$$$!!!! & TIME!!!! & HASSLEFORPEOPLEJUSTTRYI GTODOTHEIRJOB!!!!

          In practice (in both major senses of the word here:) ~all audits are Compliance Audits. In your defence re your criticisms, I'd shortcutted to just talking about compliance audits -- my fault, I wasn't clear. To be clear re the impact of the difference, any of the 2nd Tier firms I've had exposure to could smash a global audit of McDonald's on a compliance basis. As could a couple of 3rd Tier. And McDonald's would be about the corner-point extreme for man-on-the-ground sheer-numbers requirements.

          So, many 3rd Tier and all 2nd Tier firms could handle the firms you're thinking of on the basis of the 99.99...% of audits' compliance approach.

          My points re the compliance audits were that :

          A/ they are PROFOUNDLY more limited than most people even consider when they hear the word "audit"

          B/ even/FAR worse, the Practitioners have quietly behind-the-scenes sharply wound down even the "old" (80s-90s) standard minimum-acceptable standards. Eg, 10% sampling of transactions A-Z, as a Profession-ally agreed benchmark? Ha! 0.01% given the tick now automatically. And only need to sample at Entry step if you've given the tick to the Procedures Manual. So that's 0.01% to step A; steps B-Z therefore guaranteed and given audit tick.

          And often it's not even that thorough.

          1. W.S.Gosset Silver badge

            Re: Where were the auditors?

            Also, there's some very nasty "model"-based shit creeping in as a substitute for actually doing any real work.

            Example: coupla years ago I was initially hired for contract for urgent prep for explicit and exceptional Audit of whole-org-overhauling project's accounting results. Big5 coming in. A$488bn investment pool (only A$88bn net). (Turned into a wildly different project when we discovered HOW BADLY the investment numbers were cocked up due to exhausted staff closing off the project too early without full testing.)(Indication: at least A$50bn out, manually corrected daily)

            Got it audit-ready by my (and yours) old-fashioned standards and moved onto the SERIOUS shit of overhauling HOW the numbers were calculated. (Massive story there. Wound up with a world first.. Four of us having at least one physical collapse. One of them resigned; not just his job but his entire 30yr career; leapt at the chance to be a part-time marketing admin clerk for his local primary school.)

            "Imagine my surprise" when a total of 1 auditor turned up and proceeded for the next 4 months to have nothing more to say, and no interest in anything other, than demanding we explain the differences between our Admin costs vs Their Model. But oh boy the screaming/toysoutofpram-ing and the threatening. Bear in mind that our conservative estimate of Investment measurement errors was over A$50bn. They never even asked about the Investments -- the entire purpose of the company. We eventually got them able to reconcile their Standard Model For Admin Costs with our own govt-mandated business model. And we got a formal Big5 Audit thumbs-up. With at least A$50bn daily operational manually-overridden error on what was a net A$88bn fund.

            Less than a month later I pulled the trigger on a 36hr cutover I'd had to create from scratch myself --ranging from SQL I'd written after identifying the requirement from maHOOsive bigdata crawling to talking the trading desks into double entering every trade on the day-- --and at runtime requiring 7 departments' major involvement and frequent tagteaming-- where if I'd made a single error a whole Australian State would have had to shut down all local government activities (eg, paying staff) for 3-6mths unless emergency legislation was passed.

            "Key Man Risk", much?

            The massive activity and resources diversion required for this was ongoing during the "ground up!" audit. A moment's questioning would have revealed whole-org Existence threat and hence downstream massive whole-orgs' Existence threats and hence maHOOsive downstream whole-population threats. All necessarily requiring Audit instafail. It did not even register on the Big5 Auditors' universe.

            1. W.S.Gosset Silver badge

              Re: Where were the auditors?

              Result (if anyone's interested): A$0.

              A$1.6bn error from my scripts. Previously identified as a baked-in risk due to the platform system and no-further controllable. Fortuitously much lower than my tests' average. And "materially" lower than the naive cutover's average of well over A$500bn (over 100%).

              After the whole-company manual additions I'd realised therefore necessary, was able by some SQL dancing (how often do YOU use Cartesian products?) to pinpoint that $1.6bn to 3 transactions: 2 deleted without replacement, 1 not created (IIRC. Might have been the other way round).

              All nailed by having canonical spec from query of both accounting sides plus value: 30 seconds for accounting grad to create 3 trx manually.

              Only time I've witnessed 20+yr professional people laughing hysterically when I announced it. All over the quarter-football-field-sized office (same length, quarter width). That's when I collapsed. Went number-blind for nearly 6 months -- like dyslexia, they were just meaningless squiggles.

  5. Anonymous Coward
    Anonymous Coward

    Map view

    I looked at them, when the news of the Singapore misdeeds came to light. It struck me that their earnings and revenue growth was tooo perfect, and if they would fake in Singapore they might fake in other markets too.

    So I did my trusty old "go look at a map at their HQ"

    https://www.qwant.com/maps/place/addr:11.685827536229615;48.145866115156046:35@Einsteinring_35#map=16.68/48.1458807/11.6865327

    Ask yourself if this is the HQ of a Eur20 billion business?

    I said NAH, fake.

    1. renke

      Re: Map view

      The address is fitting. In the Einsteinring (everything is relative, even €1.9bn) next to the Adam-Riese-Weg (16th century author of [creative] mathematics books)

    2. W.S.Gosset Silver badge
      Happy

      Re: Map view

      Aschheim!? :D Whack an "R" in there (it's already pronounced almost the same) and you have "Homeland of (the) Arseholes".

      Genius.

      1. Charlie Clark Silver badge

        Re: Map view

        It was probably chosen for two reasons: tax and regulation. Wirecard AG didn't fall under the remit of the BaFin (FCA) but under the government of the very parochial local government of Upper Bavaria. Mind you, it does look like BaFin did also fuck up but it has a history of this on big money projects. German savers seem to be magically drawn to "too good to be true schemes" in other countries.

    3. anothercynic Silver badge

      Re: Map view

      Actually, having looked at Google Streetview, that building looks just like another faceless office block in a faceless business park near the Messestadt, so yes, this is a perfectly acceptable place for an HQ. Remember that this is the parent company, and as such doesn't really need a massive campus for 120,000 employees or whatever the number may be. Given the parent once was InfoGenie, and given that much of the work is done by other subsidiaries... this is not unusual. According to Google Maps, Wirecard sits in multiple of the buildings, Wincor Nixdorf (a Siemens company) has the rest, so it's pretty much like Microsoft or Oracle on the Thames Valley Park in Reading. It's really not unusual. If it was a residential address, I'd be more suspicious.

      1. W.S.Gosset Silver badge

        Re: Map view

        Next you'll be suggesting Canary Wharf/Docklands is not grimy Cockney-homeland slumtown and that no German city has ever even considered setting up high-tech districts in existing industrial areas which are startlingly close to town by UK standards.

        *cough*

        Also, it's in Arschlochheim in Einsteinesring!

        :D

  6. Anonymous Coward
    Anonymous Coward

    When the Tide goes out

    You get to find out who's not wearing their underwear.

    Expect much more of this courtesy of Coronavirus.

  7. Carl W

    FairFX too

    FairFX services currently suspended too -- apparently they use Wirecard as a card issuer

  8. Greybearded old scrote
    Facepalm

    Pockit

    While they have admitted that the problem is Worldpay UK having had their licence withdrawn, the status updates frequently refer to it as 'planned maintenance.'

    I use one of their cards to segregate online spending from my real account, so that plan has minimised my inconvenience as intended. OTOH, I have to feel sorry for the poor sods who are getting their bennies paid through one. DWP are supposed to be helping out on that front. Having endured their attention my response is, "Yeah, Right."

    1. Greybearded old scrote

      Re: Pockit

      BTW, does anyone know of a prepay card that hasn't been affected?

      1. Anonymous Coward
        Anonymous Coward

        Re: Pockit

        I have a Virgin Money prepaid Mastercard apparently provided by 'prepaytec' and it's not affected as far as I can tell

    2. Greybearded old scrote
      FAIL

      Re: Pockit

      Oh, and Pockit are still branding their emails with, "Banking that works for you."

    3. anothercynic Silver badge

      Re: Pockit

      WorldPay is not the same as Wirecard. I'm sure you mean the latter.

  9. achillesneil

    FCA are using a hammer....

    Having worked in financial services in the past, I have seen so many financial scandals where the FCA sat on their hands and did nothing, even when people were warning them for a long time. By the time they took action, the horse had already bolted. This time, they come down like a ton of bricks on Wirecard and prevent hundreds of thousands of people accessing their money, often the only money they have, without any alternative solution to put in place. They are just not fit for purpose as a regulator.

  10. Anonymous Coward
    Anonymous Coward

    Bong!

    "The order has frozen electronic cash in apps that rely on Wirecard as a payment processor, like Anna Money, Curve, Pockit, and Soldo, among others, to the dismay of customers."

    Snort. I'm sorry, but I look at the names of some of their users, and I just have to laugh.

    I do keep a vague eye on fintech developments via MoneySavingExpert (on the basis that if MSE don't yet know about them, they are certainly far too "beta" to risk depositing any money with whatsoever), but, with a couple of noteable exceptions, I look at many of these fintechs and see virtually nothing of much use or value whatsoever (eg, "savings" apps that don't even pay you any interest), apart from parting angel investors from their money while they spend it on "agile" code and weirdly spelled names and branding from (the much missed) Steve Bong and his fellow collaborators? Much of the sector seems to smell of garlands of flowers, specifically, tulips…?

    (Horrible, horrible, horrible, thought: the sad disappearance of Mr Bong seemed to coincide roughly with the emergence of a certain shifty, scruffily dressed person with a love for sweatshirts and beanie caps…? «screams»)

  11. Anonymous Coward
    Anonymous Coward

    A story and impression of Wirecard

    Briefly I worked there. I've kept stumm because of the company attitude - e.g. suing the FT and its journalists. I never saw anything illegal at my level, but what I saw and heard about concerned me enough to leave ASAP and maintain a goal of "my name must not be on any paperwork or business cards". I learnt that from a boss earlier - distance yourself from disasters.

    Location - why Aschheim? The company began as one of many Munich start-ups and moved there. Yes, that office park is a faceless district on the edge of the old airport (control tower still can be seen), but that's every business district I've ever seen after hours. It is conveniently located for the Arcaden shopping mall, the motorways, and has a S-Bahn nearby which is a quick connection to downtown...also absolutely soulless dead from about 5pm.

    Why that building? Why not the nice air-conditioned empty (!) building next door where they could have also hosted half their infrastructure onsite in custom server rooms? And saved money on offsite hosting? Apparently, the previous facilities manager knew someone, and therefore Wirecard got the other building without air-co and left its infrastructure off site. The *former* facilities manager apparently got something from the deal ...? fired..? the landlord's daughter in marriage...? Who knows.

    Politics - Shortly after I arrived I asked about the shadow org-chart. You know, the one that tells you who was where five years ago and how they walked on water/got promoted on merit/slept with each other to get where they are today. Plus who is still sleeping with whom, or got married. Useful jungle knowledge. In places a very tangled web. Seems to have been a shake out a few years back. Some familiar names arrived in new companies. Perhaps they saw something they didn't like? Or someone else won the promotion game and zapped the competition?

    Culture - if I had trouble defining passive aggressive beforehand, I learnt the definition in depth there. Always looking over my shoulder, watching the internal politics. I never felt comfortable and never trusted the company. I did what I could to protect myself. Pay is an issue, but at least you get a t-shirt (in the wrong size) for joining and annually on your birthday.. If you had a company car, you took it and the lease contract with you if you quit. Another little tie that bound. Or you could play the game and order a new one - "if you fire me, you'll have this car on *your* hands!"

    Hiring - firing : Lot of new arrivers announced weekly, but not many new desks. Hmmm... Company did expand into other buildings but not at the pace of the announced new arrivals... Hmm.. Churn? Seemed fond of immigrant workers on a visa for some positions. You can pay them less than the locals and their work visa binds them to you. Is that indentured service? I wondered how they managed to afford the aStRoNoMiCaL local rents.

    Wages - almost always paid on the very last daily clearing cycle of the very last banking day in the month. Don't look for your money until late evening. One of the advantages of owning a bank plugged straight into the clearing cycles. Salaries didn't seem high, more like too low. In Munich that really matters.

    Profits/revenue - on the one hand the profit per transaction is tiny and almost fixed. On the other hand once you've built the platform, adding more volume just adds more revenue and profit. The development costs are sunk, so only running costs remain. However all payment processing companies are in the same game, so unless people or electricity is cheaper where you are, surely they should all be roughly equally profitable? I was suspicious that the revenue and profit diagram was practically engraved in stone - two straight lines that never ever bent no matter what. How is this possible over so many years? I never got a full explanation of how the business worked at the transaction level.

    IT infrastructure - I once read a book about closely coupled critical systems - one small action can have devastating consequences. I quickly realised that Wirecard was operating exactly that. One false move and the whole platform would fall down on the IT side. Imagine rm -rf * being powerful enough to delete your company. They were big fans of open source – “ 'cause it's cheap init!” This produced a monoculture of systems. There are reports in German at onvista.de and gruenderszene.de that point to a complete 4 day outage between 5-9 February 2016. No announcement was made externally. Anecdotally I heard a network or infrastructure engineer was tasked with removing one virtual machine around 2pm Friday and was in the wrong permissions mode or environment. They deleted *every* virtual server across both data centres and realised their mistake in about 20 seconds. The name was kept well guarded and I heard they kept their job. Staff came in around the clock. Initial services were restored in four days, full recovery took months.

    In the basement there was a locked archive of documents. Once we wanted to calculate exposure and risk in event of an outage - to whom would we owe money, how much, for how long, at what level of downtime? under 5 nines? Under 98%...? Never got access, never knew how exposed the company was. What was buried in that archive? This worried me and pushed me faster and faster to the exit door. Potentially open ended risk and liabilities leading to bottomless penalties is harmful to my bank balance. Plus it seemed management would sign any contract to get business irrespective of risk - hook them first, worry about it later.

    I heard stories about the early days when they handled payments for porn and gambling. Tattooed leather clad customers arriving in limos with ..err... ladies .. to negotiate ..contracts. I also heard that the board wouldn't ever go to the USA for fear of charges over their gambling website connections from earlier. Another reason to leave, fast.

    The company was divided into roughly four pieces plus overseas. Technologies, payments processing, card issuing, bank. Like crabs in a bucket there was a push to get promoted to the board. Susanne Steidl of issuing won the race and according to the news is now being looked at by the Munich State Attorney's office. The UK / Ireland business was a part of Northern Rock - remember them? Trying to work with overseas units wasn't easy - even though Aschheim was HQ! Dubai would or would not answer based on ...dice..? Austria was a decent office. The Singapore office moved to be nearer to Google perhaps? Occasionally there was chit chat about developing "something" to get business from social media and search giants - perhaps that is the reason for the Singapore office location?

    Audits- lots of those. Every 'serious' customer could audit the company’s operations and many did. It wasn't unusual to have multiple customers in for audits each week. How did so many customers and regulators and auditors miss the signs for so long?

    Acquisitions - never could understand the strategy here. Snapping up small companies in countries with low GDP per capita for three times their annual revenue? OK- you can be a "worldwide player" in a short time, but that's a lot of payment transactions at a few cents each to recoup the acquisition costs. A tiny percentage of a small digital economy remains peanuts globally. When I read about the India acquisition, my mind boggled. What justified the acquisition price? Ditto Turkey. They went up against other industry players for an acquisition a few years back - my impression was the Wirecard 'a' team wasn't as good as their competition's 'b' team when it came to serious acquisitions. The citibank card services USA acquisition is perhaps the exception to this picture?

    Ethics - there are ethical people in house. Such as those who stopped Wirecard customers from investing the end customer's (Joe Public) money to make more profits. Older readers may recall Enron or Robert Maxwell...

    Wirecard- abbreviated to WD ...not WC because ...WC means toilet.. although I don't suppose that matters anymore.

    Recent events - the KPMG report was pretty damning. When CEO Braun fired COO Jan Marsalak and decided to sue "john Doe // anonymous" I thought '1) the money was never there 2) this is a diversion 3) Jan Marsalak knows where the bodies are. If Jan is smart he'll sit down with his lawyers and the police tomorrow' Latest news suggests Jan is with his Filipino wife in the Philippines ... or China..?

    How did the fraud start? My guess - way back when the company was tiny, someone faked a document because paperwork and or money was missing or late for an audit. Let's say for a small amount. $€20 000. No auditor really worries about a small amount somewhere offshore in a company of say a couple of million turnover. It is noise in the numbers. Then it snowballs into a monster.

    Key question in my mind - if you can run the company "successfully" for years with so much cash missing, how much do you *really actually need* to run that company?

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