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Germany’s top financial supervisor dismissed a decade of warnings about Wirecard

wsj.com

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Re: Germany’s top financial supervisor dismissed a decade of warnings about Wirecard

#171

Post by formerly_proven »

s9w wrote: post #143
rasz wrote: post #128

Earlier quoted context omitted.

You are technically not wrong. I mean Hans-Georg Maassen, head of BfV (spy agency), did lose his job. Not after sharing secret information with neo nazis, that wasnt enough. He doubled down by calling fake news at a video showing neo nazis chasing/beating immigrants. Had to leave his BfV presidency ... for a higher paying position at the interior ministry ;-) aka promotion.

That is not what happened at all.

That's true and you are getting downvoted incorrectly. At first the interior minister wanted to move him to another equally well-paid position, but due to political backlash and also Maasen insisting there is a "radical left cabal" against him inside the government was retired early, which is still very much a golden parachute, but also the intended way for the government to remove political officials from office.

Re: Germany’s top financial supervisor dismissed a decade of warnings about Wirecard

#172

Post by R0b0t1 »

gumby wrote: post #127
s5300 wrote: post #117

Earlier quoted context omitted.

Yeah, but you can literally be 72 hour psych holded with absolutely zero contact with the outside world by the decision of a single, simple psychiatrist. That's arguably worse than being secretly arrested.

Yeah that’s a good example of extrajudicial punishment. Well, a terrible example, but “terrible” in the sense of its abuse. I wonder how 72 hours can be constitutional when arraignment is typically supposed to be 24. Perhaps it’s like fingerprints, where assumptions rather than science dominate. The idea of a brief psych hold is reasonable on some platonic level (I’ve had friends have psychotic breaks who were far be…

There's stories/news articles about psych facilities and hospitals that feed them with patients to get government money and insurance money. Then people are kicked out at the end of two weeks. Some judges are complicit in this, they go along with whatever the medical staff says.

Re: Germany’s top financial supervisor dismissed a decade of warnings about Wirecard

#173

Post by calpaterson »

this_user wrote: post #110
calpaterson wrote: post #22

Sadly can't read the article as I don't have a subscription but have followed this in the FT. Germany has an ultra-protectionist political culture for pet German companies. Wirecard was one such pet company but there are many others who have benefited from implicit state support in the form of lowered standards and private favouritism: Deutsche, VW, Siemens, etc. Wirecard even holds a banking license so should be sub…

Wirecard as a whole does not hold a banking license, only their banking subsidiary does. They were actually properly regulated by the BaFin, but everything else had much more loose oversight.

They were absolutely not properly regulated by BaFin. For starters the bank released false accounts to the public - as Wirecard Bank is 100% owned by Wirecard it's accounts aren't broken down from the (fraudulent) Wirecard accounts under the rules for consolidated subsidiaries. I think this is a big problem for a regulated financial institution.

Secondly, Marcus Braun (Wirecard Chief Exec) managed to take an unauthorised director's loan from Wirecard Bank equivalent to 1/5 of the banks equity capital. He eventually relented and repaid the money but not BaFin does not seem to have gotten involved. Surely this should have at least rung alarm bells!! Apparently not, BaFin continued to sleep on the matter.

Finally, Wirecard bank has now collapsed in a disorderly fashion with depositors unable to access their deposits for a period, foreign regulators freezing funds to defend depositors, etc. Wirecard Bank is a very small bank. If BaFin is fluffing it up this badly on the easy cases, what is going to happen when a big bank goes bust? There were rumours in 2017 that Deutsche was going to go insolvent - how much confidence to you have that BaFin would manage that process well? Or would we find also that 50% of their balance sheet does not exist?

Re: Germany’s top financial supervisor dismissed a decade of warnings about Wirecard

#174

Post by new2628 »

poushkar wrote: post #33
ChuckNorris89 wrote: post #4

Also, under Helmut Kohl, despite advice from experts to use fiber, the German government wired the whole country with copper instead because the ministry of infrastructure at the time had stocks in the copper business leaving the country's internet behind Ukraine or Belarus.[1] If you're on the DAX or a politician, you're untouchable in Germany and lots of people inside and outside of Germany have no idea of how insa…

May I ask why you have picked Ukraine and Belarus as the basis for comparison?

Faster internet than Germany, while being far behind Germany by most standard socio-economic metrics.

Re: Germany’s top financial supervisor dismissed a decade of warnings about Wirecard

#175

Post by wjnc »

this_user wrote: post #110
calpaterson wrote: post #22

Sadly can't read the article as I don't have a subscription but have followed this in the FT. Germany has an ultra-protectionist political culture for pet German companies. Wirecard was one such pet company but there are many others who have benefited from implicit state support in the form of lowered standards and private favouritism: Deutsche, VW, Siemens, etc. Wirecard even holds a banking license so should be sub…

Wirecard as a whole does not hold a banking license, only their banking subsidiary does. They were actually properly regulated by the BaFin, but everything else had much more loose oversight.

In my experience this is a truism. Licenses almost never are held by the "top" legal entity in a firm, but fall to subsidiaries. The thing is that oversight not always carries over the boundaries of legal entities. Perhaps dividend arrangement do, but if other parts of the firm are in (regulatory) different markets it often ends the oversight of the regulator.

Re: Germany’s top financial supervisor dismissed a decade of warnings about Wirecard

#176

Post by calpaterson »

hobofan wrote: post #109
calpaterson wrote: post #22

Sadly can't read the article as I don't have a subscription but have followed this in the FT. Germany has an ultra-protectionist political culture for pet German companies. Wirecard was one such pet company but there are many others who have benefited from implicit state support in the form of lowered standards and private favouritism: Deutsche, VW, Siemens, etc. Wirecard even holds a banking license so should be sub…

> BaFin ("Germany's SEC" as the headline states) makes the risible excuse that he didn't apply proper oversight to them because they are arguably a "technology company" Given that they've been deeply involved in regulating cryptocurrencies in the last years, that's a bullshit excuse if I've ever seen one.

Not least because while they claim they weren't doing proper oversight of Wirecard they still somehow managed to find time to litigate against various market participants and newspapers trying to blow the whistle (including the FT), banned short selling, etc.

Re: Germany’s top financial supervisor dismissed a decade of warnings about Wirecard

#177

Post by _whiteCaps_ »

perlgeek wrote: post #166
chii wrote: post #24

Earlier quoted context omitted.

how can a company be both owned by, but also regulated by "the same" entity? that is a conflict of interest aint it?

So, we should forbid all politicians to own stock.

No, but it should be in a blind trust.

https://www.investopedia.com/terms/b/blindtrust.asp

Re: Germany’s top financial supervisor dismissed a decade of warnings about Wirecard

#178

Post by DangerousPie »

zentiggr wrote: post #153
slightwinder wrote: post #76

Earlier quoted context omitted.

> He sold his shares hours(!) before being signed on as minister This is normal procedure. There is a rather short timeframe between appointment and becoming a minister. Of course did he sold it only after he know it would be a problem. > How you can mistake this obvious corruption for incompetence is beyond me. He had no benefits personally, so it's not corruption. This is just a nice story you tell the kids to give…

So... if he hadn't pushed for copper and instead did the 'better for society' fiber solution, the company wouldn't have been worth nearly as much, possibly much less. And those stock sales would have been much less profitable. Not direct cash bribe but definitely far more motivated than just incompetence.

I don't get it. Once he sold the shares he had no further interest in their value. Nothing that happened once he became a minister could have affected his profits from the sale of his stocks. Why are you saying "those stock sales would have been much less profitable"?!

Re: Germany’s top financial supervisor dismissed a decade of warnings about Wirecard

#179

Post by KKKKkkkk1 »

Looks like BaFin was not merely incompetent but actively malfeasant. People were apparently wrongly convicted due to their good-faith efforts to expose the fraud.

BaFin’s role includes ensuring that listed companies abide by securities law, for instance by communicating truthfully with their shareholders. But BaFin didn’t look into the lawsuit’s allegations against Wirecard because there was no evidence the company had provided misleading information, the spokeswoman said.

Instead, BaFin opened a probe into the accusers. Wirecard had filed a complaint with the agency and the Munich prosecutor after the suit caused its stock to slump. Two former officials of the small shareholders’ association were charged, convicted of market manipulation and handed suspended prison sentences.

Are these folks going to have their names cleared now?

Re: Germany’s top financial supervisor dismissed a decade of warnings about Wirecard

#180

Post by KKKKkkkk1 »

gridlockd wrote: post #161
thomaskcr wrote: post #79

Not only that, they went after the short sellers who were writing about it publicly. > Germany's pursuit of short sellers began when Perring’s previously little-known outfit, called Zatarra Research, published its report about Wirecard. > In March, just three months before Wirecard’s collapse, prosecutors dropped their case against Perring after he agreed to make a donation of an undisclosed sum to a charitable organ…

They didn't prosecute "short selling", they prosecuted market manipulation: 1. Get a large short position 2. Publish damaging information 3. Profit It doesn't even matter if the information is true. If it is true, it is insider trading. If it isn't true, it is libel. Either warrants prosecution.

You don't understand what the word insider in "insider trading" means.
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