After the Enron scandal, the auditor (Andersen) was dismanteled. The german branch of Andersen was bought by no other than Ernst & Young, the auditor of Wirecard.
TIL parts of Anderson were bought...
Wirecard – The “German Enron”, and a personal history
81–88 of 88 posts
Re: Wirecard – The “German Enron”, and a personal history
#82I know German but never heard of "Bumsbude" before. It got a chuckle out of me. The literal meaning (to use similar English words) would be "Shag shack", aka "brothel"...
Never heard it either. I guess we don't roll with the right crowd lol
Re: Wirecard – The “German Enron”, and a personal history
#83I worked for 10tacle some 13 years ago - the company mentioned as a warning flag. The whole operating mode of the company was to buy up companies with borrowed money and run for more investment. There was no will to launch products. Good riddance to them.
Re: Wirecard – The “German Enron”, and a personal history
#84> Lessons to be learned * even a pretty obvious fraud can go on much longer than one would think if the organizers are ruthless enough. My original short position would have gone against me 25x over 12 years and the share price even after today’s disaster would be higher than back in 2008 (just to be clear: the company is worth ZERO in my opinion) * a company that goes against people who write negative articles as ag…
amusingly: back in 2019, when journalists pointed out irregularaties in the company's accounts, the German Financial regulator's reaction was to ban short selling of their shares... and then issue legal proceedings against the journalists > On Monday, BaFin banned further short selling of shares in Wirecard, the Dax-listed payments services group. The stock has dropped steeply after FT reports raised questions over t…
Governments and regulators don't always act in a clear-headed way when a company seen as a national champion is involved. Often the fear of bringing down political wrath, making a mess of national prestige, and more crop up even when explicit political meddling is absent.
A company that understands it's in such a position is, IMO, more likely to misbehave because they know the odds of there being consequences are much lower.
Re: Wirecard – The “German Enron”, and a personal history
#85Earlier quoted context omitted.
Unfortunately the same reasoning could be applied to Hertz selling stock in a bankrupt company, which would have been impossible 5-10 years ago, but maybe even a few months ago. I think the markets have been completely messed up by stimulus since 2008, and it's only getting worse. Governments are buying company bonds for gods sake. Stocks aren't about market pricing any more. They are some vanity metric that governme…
> I think the markets have been completely messed up by stimulus since 2008 Maybe, but OTOH the stock market returns are actually no different from pre 2008 (S&P500 in this case): https://www.macrotrends.net/2526/sp-500-historical-annual-re...
I concur with zpeti’s sentiment that “I think the markets have been completely messed up by stimulus since 2008, and it's only getting worse.”
And as you, Qasaur, say: “this erroneous monetary policy will only stop if politicians and central bankers are willing to stomach a harsh market recalibration, but seeing as they seem to not be willing to do that judging from their recent actions so I fear that this systemic malinvestment and inequality will just get worse and worse until something breaks.”
I think society has reached that breaking point and starting to show the cracks. Digging underneath the protests/riots/violence/standoffs in cities like Minneapolis or Seattle, as they have revealed, what you'll find is rooted in socioeconomics.
Re: Wirecard – The “German Enron”, and a personal history
#86It might still not be the biggest scandal in the recent history of Germany: From 1993-1999 a company named Flowtex caused 4.2 BN Mark (roughly 2.1 BN € or even 3 BN if adjusted for inflation) of damages with a remarkably simple fraud scheme: They would claim to produce horizontal drilling machines (which allow you to e.g. put in tubing for cables without completely opening up roads) that they would sell to leasing co…
Wow, that sounds identical to the DC Solar fraud that happened just a few years ago in the US, except with solar generators. Guess history repeats itself in this case:
https://pv-magazine-usa.com/2020/01/25/dc-solar-owners-plead...
Re: Wirecard – The “German Enron”, and a personal history
#87After the Enron scandal, the auditor (Andersen) was dismanteled. The german branch of Andersen was bought by no other than Ernst & Young, the auditor of Wirecard.
The US govt did a lot of shady stuff with dismantling Anderson (a not so uncommon theme) and broke several laws. By the time judges scolded the govt etc, it was too late. Arthur Anderson was done for.
Re: Wirecard – The “German Enron”, and a personal history
#88> In 2019, the boss of the supervisory board hired KPMG mainly to independently confirm that everything is splendid at Wirecard (E&Y is the auditor of Wirecard). So, will anything happen to E&Y, or do they just get to say "we didn't know that was fraudulent, we just did what we got paid to do"?
Arthur Andersen went out of business after Enron and the big five became the big four. Maybe that was a good outcome in terms of accountability but there needs to be some effective process for promoting new members if we are going to keep culling this club.
Arthur Anderson if I’m recalling correctly didn’t go out of business so much as pushed out of business not fairly or completely legally by the feds.