The Federal Financial Supervisory Authority (BaFin) has accused one of its employees of insider trading in the stock of the now-bankrupt fintech company Wirecard. The regulator has filed a complaint with the Stuttgart public prosecutor’s office. Reuters reports this.
The suspect, whose name is not disclosed, works in the securities supervision department. On 17 June 2020 he sold structured securities based on Wirecard shares—exactly one day before auditors Ernst & Young (EY) disclosed a €1.9 billion shortfall in the company’s accounts.
BaFin suspended the employee and initiated disciplinary proceedings.
Parliamentary officials involved in the investigation noted that at the outset of the Wirecard scandal the German finance ministry did not take action regarding insider trading within the supervisory authorities. Yet as the company’s collapse approached, BaFin staff were “buying and selling its shares in ever larger volumes”.
The regulator banned staff from trading the stocks and other securities of companies it oversees in October 2020. It remains unclear why the complaint to the prosecutor involved only a single case, Reuters notes.
According to the report, in the coming days Germany’s finance minister Olaf Scholz will announce a possible reorganisation of BaFin.
In June 2020, a hole of almost €2 billion was found in Wirecard’s balance sheet. The company subsequently began bankruptcy proceedings.
Police arrested former Wirecard chief executive Markus Braun on suspicion of falsifying cash balances on the company’s accounts.
Former Wirecard top executive Jan Marsalek, who is described as the mastermind of the accounting fraud, fled days before Munich prosecutors issued an arrest warrant for him. On suspicion of organizing his escape, a former senior official of the Austrian Secret Service and a former right-wing member of parliament were arrested.
Marsalek’s whereabouts remain unknown. According to some reports, he fled to Russia.
At the end of July, Wirecard investors filed a lawsuit against BaFin, accusing the regulator that the measures taken against the company were belated. Later it emerged that Commerzbank had warned BaFin about manipulations of Wirecard as early as the start of 2020, but the regulator took no action.
How Wirecard collapsed: dubious clients, fake reports and a €2 billion hole
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