Wirecard AG Class Action Lawsuit
- Company Name
- Wirecard AG
- Stock Symbol
- Class Period
- August 17, 2015 to June 24, 2020
- Eastern District of Pennsylvania
The Wirecard AG class action lawsuit charges Wirecard and certain of its officers and directors with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Wirecard securities between August 17, 2015 and June 24, 2020, inclusive (the “Class Period”). The Wirecard class action lawsuit was commenced on July 7, 2020 in the Eastern District of Pennsylvania and is captioned Brown v. Wirecard AG, No. 20-cv-03326.
Wirecard is a technology company that purports to provide outsourcing and white label solutions for electronic payments worldwide.
The Wirecard class action lawsuit alleges that defendants made materially false and/or misleading statements, as well as failed to disclose that: (1) Wirecard overstated its cash balances during the Class Period, falsely claiming it had €1.9 billion of cash in a trust account that did not exist; (2) Wirecard overstated its financial results during the Class Period, including revenue and EBITDA; (3) Wirecard did not have adequate risk management or countermeasures; (4) Wirecard’s external auditor during the Class Period, Ernst & Young GmbH Wirtschaftspruefungsgesellschaft, failed to audit Wirecard in accordance with applicable auditing principles; and (5) as a result, defendants’ statements about Wirecard’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
On June 18, 2020, Wirecard issued a press release entitled “Wirecard AG: Date for publication of annual and consolidated financial statements 2019 delayed due to indications of presentation of spurious balance confirmations.” On this news, over the next two trading days, the price of Wirecard’s American depositary receipts (“ADRs”) – WRCDF and WCAGY – fell more than 75% and 76%, respectively.
Then, on June 22, 2020, Wirecard issued a press release, entitled “Wirecard AG: Statement of the Management Board about the current situation of the Company,” disclosing that “[t]he Management Board of Wirecard assesses on the basis of further examination that there is a prevailing likelihood that the bank trust account balances in the amount of 1.9 billion EUR do not exist.” On this news, over the next two trading days, the price of Wirecard’s ADRs – WRCDF and WCAGY – fell more than 45% and 46%, respectively.
Thereafter, on June 23, 2020, CNN reported that Wirecard’s Chief Executive Officer and Chief Technology Officer, defendant Markus Braun, had been arrested “after a $2.1 billion hole exploded in [Wirecard’s] accounts.” CNN further reported that “Munich prosecutors confirmed that Braun, Wirecard's former CEO, was arrested on suspicion of having inflated the digital payment company’s balance sheet and sales through fake transactions in order to make it more attractive to investors and customers.” On this news, over the next two trading days, the price of Wirecard’s ADRs – WRCDF and WCAGY – fell more than 8% and 7%, respectively.
Finally, on June 24, 2020, Reuters reported that “Wirecard’s missing $2.1 billion is being investigated by the Philippines,” following reports that the Philippine banks that Wirecard claimed held the cash in question “have denied any links with [Wirecard],” and that Wirecard’s Chief Operating Officer, defendant Jan Marsalek, had fled to the Philippines. On this news, over the next three trading days, the price of Wirecard’s ADRs – both WRCDF and WCAGY – fell more than 88%.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.