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Wirecard AG

13 days left to seek lead plaintiff status

Case Summary

Company Name
Wirecard AG
Stock Symbol
WRCDF/WCAGY
Class Period
April 7, 2016 to February 1, 2019
Motion Deadline
April 9, 2019
Court
Central District of California

The complaint charges Wirecard and certain of its officers with violations of the Securities Exchange Act of 1934.  Wirecard provides outsourcing and white label solutions for electronic payment transactions worldwide, offering more than 25,000 customers state-of-the-art technology, transparent real time reporting services and support in developing their international payment strategies.

The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Wirecard’s business and operations.  Specifically, defendants failed to disclose that, for the period spanning from 2015 to 2018, a senior Wirecard executive in Singapore had been accused of forging and backdating contracts, including falsifying accounts and money laundering; that an external law firm commissioned to investigate Wirecard’s Singapore office had reportedly found evidence of “serious offences of forgery and/or of falsification of accounts”; and that Wirecard had downplayed weaknesses in its internal controls over financial reporting and failed to disclose the true extent of those weaknesses.  As a result of this information being withheld from the market, Wirecard securities traded at artificially inflated prices during the Class Period, with its shares reaching prices of more than $113 per share (WCAGY) and $227 per share (WRCDF).

On January 30, 2019, the Financial Times reported that a “senior Wirecard executive was last year suspected of using forged and backdated contracts in a string of suspicious transactions.”  According to the article, an internal presentation “outlined potential violations of Singapore law, including ‘falsification of accounts’ and ‘money laundering.’”  Further, the “whistleblower who briefed the [Financial Times] on the document was motivated to do so, the person said, out of concern that no action appeared to have been taken over potentially criminal acts inside a company presenting itself as a blue-chip financial institution.”  On this news, the price of Wirecard shares fell nearly 9% (WCAGY) and 15% (WRCDF).

Then on February 1, 2019, the Financial Times reported that an “external law firm commissioned by Wirecard to investigate the payment company’s Singapore office found evidence indicating ‘serious offences of forgery and/or of falsification of accounts’, according to a preliminary report on the inquiry.”  On this news, the price of Wirecard shares fell nearly 20% to close at $66.64 per share (WCAGY) and over 18% to close at $133.88 per share (WRCDF) on February 1, 2019.

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