Wirecard and the Curious Case of the Missing $2 Billion | WSJ
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- čas přidán 25. 06. 2020
- Payment processing company Wirecard was the darling of Germany’s fintech industry until auditors uncovered a $2 billion hole in its accounting. WSJ explains what we know about the missing money, as investigators are still trying to understand what happened. Photo composite: George Downs
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#WSJ #Wirecard #TwoBillion
This is a fascinating and troubling story that speaks to the need to remain vigilant when it comes to large-scale corporate accounting. My own experience with a financial institution showcased the importance of taking the time to question when something doesn't seem right - even if it means making some uncomfortable inquiries.
Amazing how far WSJ went to avoid mentioning Financial Times in this story, given they were 100% responsible for breaking it.
Poor journalism. They should give credit when when it is due
fork the FT. The only thing motivating THEM is Germany-bashing.
@@klam77 To be honest I thought the FT's attacks on Wirecard over many years was a targeted attack, but they were right, I was wrong, Wirecard appears to be a massive fraud and the latest installment is that they were actually making a loss.
Why Ernst & Young destroys everything. many People lost money cause of corrupt Rating Agencies (Same as 2008)
Big props to Financial Times for being the first and main people fighting wirecard and German auditors about the fraud.
yes it was Financial Times , Respect 🙌
SoftBank just can't catch a break lol
Yeah I was just thinking I’d do a better job lll
japanese corruption at his best
It's their fault, they are morons
the fact alibaba made softbank the kind of unexpected money, softbank have to find other places to invest. wework and wirecard founders have something in common, they know how to appeal to investors.
look at how the deal was structured!!! softbank sold this debt to small investors. they have and will not lose a single penny. they made there profits
ernst and young failed to properly verify the cash deposits over several years of audits. a single call to banks in the phillipines caused the house of cards to fall.
with that amount of money the auditor should have flown there and have a nice work week checking the books themselves
Fraud is complex and hard to find. Problem is a call isn't sufficient audit evidence because there's no audit trail left behind from it. The standard practice is to get a bank confirmation letter. If the company creates fake letters pretending to be the bank then I can see why this could happen three times (over three years) before being found.
@@Tinfed with that kind of liquid asset, authorizations should have been stricter and verifications should have been frequent. the company lacks internal control tbh
Ernst & Young acted as auditor for Lehman Brothers as well. I think the whole culture of the company is crooked.
it's not as easy as calling a bank - no one will give you this information just like that. The problem here is people who directed the fraud knew exactly how the auditors operate, what are the procedures and ways to avoid any unnecessary checks. They leveraged this knowledge + obv reputation of Wirecard did help a lot - WC was everybody darling, an EU blue-chip contender... no one would ever suspect them to be so cheeky ;-/
I'm watching this high and I feel like I just watched a whole 2 hour long documentary.
Keep fighting the good fight.
You did
Did they check between their couch cushions. That's usually where my missing money is😂
Sounds like they have been cooking the books and lying to shareholders.
yep... for a long time, it seems. Everybody was paid well so no one complained or made a fuss for some irregularities. Well, in fact, its quite difficult to trace any irregularities in multi-tier corporate structure. If the central office is lying corruption spreads down the stream. Everybody below takes it on face value.
Thanks WSJ! I just listened to this story on The Journal 👏👏
Don’t be too harsh. Who didn’t lose 2 billion dollars?
🤣🤣🤣
A billion here, a billion there, and pretty soon we're talking about some real money! 😎
Yes that’s is just pennies compared to Us government missing 21 trillion dollars.
I lose 2bil. In monopoly
Finally a german company that americans can pronounce
Literally translates to Kabelkarte in German, which just doesn't have the same ring to it.
Ernst & Young was sleeping, Bafin was sleeping, they should be held responsible. Why being responsible part only falls on citizens?
bafin only regulates wirecard bank, i am 100% certain there is no issue there. same with the fca regulated uk entity.
@@fleischwolf82 and yet they banned short selling on wirecard stock, they investigated FT and the journalists..
Manan Gandhi because of market manipulation. There were allegations that the FT author gave the articles to Hedge funds before they were published
Cant wait Cold Fusion to make this one out !
He makes some awesome videos
HONESTLY..... JUST WAITING FOR THAT COLD FUSION VIDEO ANY DAY NOW 🙏🏾😂
Nothing is proven yet! Let's wait and see. Why the duck nobody knows that the 2 Asian banks said they found employees who forged signatures of upper management and admitted they scammed Wirecard????
I am waiting for it another brilliant scam.
Amazing piece of journalism by the FINANCIAL TIME that discover it before anyone else... proper journalism
Hey if you're holding that big of an amount of money in the Philippines then you're surely doing something sketchy.
If that money is in our country🇵🇭. This is a huge amount in (trillions😱). This is a "hoax"/"purely lies". This will result to our financial system to be detected as "very suspicious". This scandal is "circus at its best" and the "blaming game" keeps rolling on and on and on.🤣😂😁😅😜
when a payment processing company doesn't know where its (nonexistant) money is
And I thought no being able to account for a couple of hundred £ after a wild night was worrying. $2bln, someone must be crapping their pants!
Sounds just like a giant front for money laundering.
@2:15 "he's a short seller" hard liquor noted in the background. Is there a correlation?
Trust accounts placed in the Philippines? Really? Did Philippines become the new New Zealand overnight?
Well the PH has some of the strictest bank secrecy law.
@@dinsel9691 - It would be under multiple names holding different asset so yes it can be done.
@@YoungDen you have seen to many movies comrade...
Each transaction leaves a footprint behind..
Even in the case of the most successful bank heist in history... the perpetrators are known and the method of "money laundering" is known... i.e. via legal money laundering schemes such as Macau casinos...
czcams.com/video/Usu9z0feHug/video.html
This reminds me of what happened about three years ago, when north Korean agents stole from the bank of Bangladesh via massive withdrawals in the Philippines.
No, South Dakota.
Reminds me of when EY didn’t identify the €1bn whole in Anglo Irish Bank’s balance sheet
A comment which got my smiling even tho I lost a lot:
Not the first time Germany was betrayed bi an austrian.
Yeah exactly.
Ooof!😆
Aaaaaand it's gone!!
It was similar to Satyam scandal back in 2009 and PWC involved in it
I landed a job at wirecard in June 2020. The day before I was supposed to hand over my resignation, they filed for insolvency. Thank God that was a near miss
You know you in trouble when a short seller calls you a fraud. LOL.
Sounds like a shell company for money laundering
.....all things "Deutsche"! (you ever wonder why Bayer would take Monsanto and only THEN the lawsuits on Monsanto begin......only then, not while Monsanto was an "Amerikan" company!
EY is done similar to Enron case Big 5 to Big 4 to Big 3
Over evaluated. Everything is over evaluated. Uber makes -3billion per year and has a value of 53 billions. Why?
Because humans
Tesla is valued at more than Toyota.I know who I'd rather have shares in.
@YoshiPeach Mario you obviously haven't been keeping up. I could tell you that Tesla has, but as a bit of evidence, the point behind Tesla joining the S&P 500 is that they are required to be profitable for 3 quarters in a row and be profitable in the current quarter in order to be admitted. Their admitance is being reviewed right now, which means they've Been profitable.
@@trinsit still shouldn't earn them a valuations higher than the world's largest automakers
@@zoravar.k7904 one company's value is not calculated against other companies except for considering ones competitive advantage over others really. But if a company can change the entire landscape of an industry, like Walmart did to the retail industry and like Amazon did to Walmart, then yes, it is conceivable that it could be valued higher than the rest of the entire industry.
Very interested to know EY's involvement in this
Sorry you don’t just lose 2Bil. Someone somewhere knows something. Of course all the executives are saying it didn’t exist. Time to watch and audit their finances.
EMT in 2008 5 trillion disappeared so...
Yeah I think I heard that they gave 400m in loans away to an letterbox company and they bought a company for 135m from another letterbox company which bought it just earlier for 35m
Probably in a Shell Company in Panama, since they aren't required to show anyone who actually is behind the Shell business.
Of course someone knows. The CFO went missing in Asia a couple of weeks ago
Hendrick Ziegler he’s not in the Philippines, that was established as falsified travel information to cover his tracks. They think he’s in Belarus now
HOW does Wirecard get to read "customer data" from a Visa Mastercard Europay transaction and then intervene performing its OWN processing settling and money transfer outside Visa Mastercard?
If someone is going to withdraw $2 Billion, there should be a paper trail. Any missing money (withdrawn) should be seen through various transfers and bank accounts. I find it hard to believe someone can withdraw that much money without leaving a trace.
I still don't understand 🤔
Is there any class action lawsuit going on?
I heard stories from people in the industry of 3rd party companies in the Philippines that handle customer service for us companies embezzling money from their clients especially those on startups where controls and reconciliations arent done well
4:16 Why showing the beautiful images of Dubai and Singapore and the favelas when depicturing Brazil? Brazil has a lot of nice places, and Dubai and Singapura have a lot of poor places as well.
Yeah, it bummed me to see that. Classic stereotype. Talking about a financial mishap, they could show any of the many financial centers of the country. But no, they went with the favelas. Quite sad.
True that they should have not shown favelas to represent Brazil. But tbh Singapore has very few "poor" places. Almost the whole country is urbanised
It’s crazy
I've worked for Wirecard Issuing when it first hit DAX, that was huge, a real life Cinderella story, a startup that made it to the top. What a fall from grace 😔 Feel sorry for the employees, probably the most dedicated, most competent engineers I've ever worked with, they do not deserve this.
Did people working there have no suspicions most of the company's business was just made up?
@@Shvabicu absolutely no, not in the tech department in Issuing where I worked, at least. I remember how vigorously the allegations were denied when the story broke in 2018 in Dubai. We now know he was a whistleblower, but back then he was portrayed as some random manager that did something shady, not a big deal. Everyone believed dr Marcus Brown and top management because of how confident and certain they all sounded. I still can't fully comprehend what just happened.
Oh god, this is so embarrassing for my country...
Why is there so much corruption.. it feels personal to me because I want to move to the EU but Germany as the leading country, these scandals keep coming out
Biggest mistake this year for me. Lost 1000 euros.
Lesson learned, if you see warnings about fraud, run.
Same.
same.
If you see warnings about fraud, run
No China, no Italy, no Spain, no emerging markets etcetc.
The market for western blue chips is saturated
Luckin happy to have some company
Why cant you guys credit the FT?
You can’t steal two billion from a company with that value and NO ONE notices.
"Wirecard" hold my beer...
You just got pranked!
What were the auditors doing?
I was told if you short something, and it stops trading, you will not be able to sell your short is that true?
I'll tell you where the money went. I woke up today and i had $1200 missing. Same for other employees who relied on wirecard to get paid.
It turned out to be a simple typo...
"some other people somewhere" Hellovaway to manage a business.
The Smartest Guy in the Room
One pro of having A.I. overlords and digital money is that the "where did the money go" question will no longer be a thing because an A.I. would be able to track where EVERY single dollar is and how it got there.
The question is how can 2 billion dollars disappear?. This is a huge huge huge amount and sudden disappear of this fund cannot be believed.
Lol of course softbank would invest in them 🤣🤣🤣
It’s in an offshore account
Two most important questions...from where did wirecard get dividend cash??was there any borrowing by wirecard??if there were any loans..bonds or commercial paper issued by wirecard..how did wirecard got credit rating???
2B heist, well done
Probably the company never actually had the money, so it wasn't a heist as such. It was faked books to make the company look better, similar to Enron.
@@FireEverLiving it begs the question of what auditors are good for anyway?
@@jobunaga4178 It is the auditors who found that the money was missing.
1:34 Yeah you can stop video right there.
Interesting could it be just in papers. It might be the revenue declared was false that was accrued from future unearned incomes and contracts then it should have bloated the receivables assets unless there is another company bought that receivables as an investments that makes it a liability on the wirecard books or just simply declare it as a cash on unearned revenue that really did not exist. That would make the FS of the company 2x look good for stockholders to sell and people to short the stocks at the sametime. I hope they found out what happened to the $2 billion caused it's brilliant.
E&y was complicit ?
There has to be something embezzled.
Me and lots of other freelancers are really worried about our money on Payoneer. Hopefully, everything will be solved soon.
Did they check under the sofa cushion. I sometimes find 20 cents that had fallen out of my pocket there.
The entire market is like this.
I use CURVE, which relies on wirecard for their transactions, and had made some amazon orders these days... now that wirecard is suspended i can't make any payment or receive refunds to that card, so hopefully amazon is able to refund me to an alternative card or bank account, otherwise i'll be waiting for my refunds indefinitely... curve says they're working to migrate to another alternative but until then any refund or whatever will be pending... lord knows for how long... 🤬🤬🤬
I'm in a similar situation but with The Change Account. Cant buy food or pay bills. This whole thing is ridiculous.
@@saml8510 that's what you get for relying on a 3rd party... you can never be as sure about it as something you're doing yourself in house...
a few months ago curve had already said they were going to move away from wirecard and afaik it was suposed to be done on the 28th of this current month... let's see if they were on schedule or if there will be even more delays... the money they make is from card transactions, fees... if people can't use them for anything they're also not making any, so it's in their best interest to fix this quickly.
i live alone with no one to help,and im starving for 3th day cuz i dont have access to my money, while they steal billions..
@@NerdyNEET Wirecard just started operating again,and i got my money from pockit
@@NerdyNEET i see,i hope they got operating asap
Shows you why the EU will never be able to replace the City.....
That's what accountants call a "whoopsie"
I never thought about the second option. If the business was done by soft banks tie with ant group it would make sense that soft bank part ways with alibaba.
Never heard of them.
Just out of curiosity as I am not an expert in this topic... isn't it possibly that the remaining assets are on the market under value right now. I mean the company is obviously rotten to the core, but there must be something left to buy right now?
Whenever money is missing it most definitely went to someone. It just doesn't disappear
It never existed in the first place.
why arent accounting companies be accountable??!
Aurora Cababis ACB will be like this 🤔 with their recent buy of another company for millions of dollars $$, a company with only 11 employees
15:27 Wirecard ply n hc behind it !!!
Many fintech companies are being questioned right now regarding their policies and actions.
People just lost trust in fintech companies because of this issue.
Here comes Harry Markopolis...
wirecard is the most traded share at the moment. The value is all over the place between 1€ - 10€ in just one day. its literally gambling
how come KPMG unable to found out the fraud.
Sees SoftBank affiliated with the company. “There’s your problem right there.”
The money is probably down the back of the sofa
Nikola vibez
I love Pav Gill. Thank you very much. ❤️❤️❤️🍀⭐🕯️
That's what you call an exit scam
Explanation for that It’s money laundry ! Cleaning the dirty money with a company name.
money laundering usually means you end up with more money then you can explain.
This is just fraud.
They were cooking their books. More firms are doing this than people think.
I heard they secretly hired Arthur Andersen as the main accounting firm.
Not a good year for SoftBank...lost billions with WeWork now this...
Softbank doesn't seem to have a great streak, first it was WeWork and now it's Wirecard.
Whats up with the alcohol bottles behind the guy?... He’s a short seller. Ahh it makes perfect sense now.
And people still think blockchain technologies are useless. 😫🤦♀️
Man i was about to comment on blockchain
I don't think anyone thinks blockchain technology is useless. A lot of people think crypto currencies are useless, but that isn't the same as saying goodbye blockchain is.
I like how the execs (maybe) thought long and hard about a carefully crafted public statement which also went through PR and the best they could do is "that money never existed or someone else has it". Seems like a lazy exit...
Any CEO who holds their hand like a Bond villain is evil AF.
I earn my interest from HEX
Get Harry Markopolos on the case, he will discover ground truth!!
They used the dark arts of accounting to make things seem better.
Wirecard? More like Wirefraud
Wirecard = Enron Junior.
Me:"Hey I found five buck inside the sofa!"
Wirecard:"Ooh I lost some money too can you check my sofa as well?"
Me:"Sure how much money did you lose?"
Wirecard:"Oh about 2 billion."
ME:(speechless)
Lernout & Hauspie, Enron.