Wirecard faked €1.9B in cash — and Germany's regulators looked the other way

Wirecard AG was a German payment processing company and a member of the DAX 30, Germany's blue-chip stock index. For years, it was celebrated as a fintech success story, with a market capitalization that briefly exceeded Deutsche Bank's. But the Financial Times had been publishing investigations into accounting irregularities since 2015.

In June 2020, Wirecard admitted that €1.9 billion in cash balances — roughly a quarter of its total assets — did not exist. The money had been fabricated through forged documents and fictitious third-party partners. CEO Markus Braun resigned and was arrested; COO Jan Marsalek fled and remains a fugitive. Wirecard filed for insolvency within days.

The scandal exposed failures at every level: Wirecard's auditor EY had signed off on the accounts for years, German financial regulator BaFin had banned short-selling of Wirecard shares and filed a complaint over suspected market manipulation by the short-sellers, and Munich prosecutors opened an investigation against the FT journalist who broke the story rather than the company. German politicians had championed Wirecard as a national tech champion. The case became Germany's biggest post-war financial scandal.