Wirecard

In June 2020, Wirecard filed for insolvency after revealing that €1.9 billion in cash balances likely did not exist, leading to its collapse.⁶⁹¹⁵ The company's former CEO Markus Braun was arrested and charged with fraud, and the scandal led to multiple legal proceedings against executives and auditors.⁶⁹¹⁵

Timeline

Money raised

Wirecard raised more than €500 million in equity from shareholders during its international expansion from 2010 onwards.⁹ In 2019, SoftBank Investment Advisers structured a €900 million investment in Wirecard through a convertible bond.⁹ Wirecard reported EBIT of €439 million in 2018.⁹ In June 2020, Wirecard admitted that €1.9 billion in cash balances probably never existed.⁶⁹¹⁵ The insolvency administrator accused former board members of breaches of duty in granting an unsecured loan of €100 million and subscribing to a bond of €100 million.¹⁵ The Munich Regional Court ordered former Wirecard board members to pay €140 million in damages plus interest.¹⁵ Approximately 50,000 shareholders filed damages claims of about €8.5 billion in Wirecard's insolvency proceedings.¹⁷¹⁸

Investors named in the sources: SoftBank Investment Advisers⁹, Brockhaus¹¹.

What happened

Wirecard was formed in Munich in 1999 as a merchant payment processor.⁹ CEO Markus Braun joined the company in 2002.⁹ Wirecard went public through a back-door listing in 2005.⁹ Wirecard acquired its German banking unit, Wirecard Bank, in 2006, allowing it to become a credit card issuing bank.⁹ Wirecard began its international expansion in 2010, acquiring large payments processors in Asia, India, and the U.S. over the next decade.⁹

By mid-2018, Wirecard had a market value of €24 billion and claimed to process payments for almost 250,000 merchants.⁹ Wirecard reported operating margins over 20 percent and EBIT of €439 million in 2018.⁹ Wirecard assumed Commerzbank's former place in the DAX 30 index.⁹ The first public questions about Wirecard's business and accounting were raised in 2008.⁹ The Financial Times began a multi-year investigation into discrepancies in Wirecard's accounts in 2015.⁹

In 2016, anonymous allegations of money laundering were made by a pseudonymous writer.⁹ Renewed investigations by the Financial Times in 2019 uncovered allegations of accounting fraud in Wirecard's Asian business.⁹ The Financial Times reported that half of Wirecard's reported business was outsourced to third party processors, with Wirecard receiving only a commission.⁹ BaFin banned short selling of Wirecard stock for two months in 2019 and filed criminal charges against two Financial Times journalists.⁹ KPMG delivered a special audit report in March 2020 stating it could not verify most of Wirecard's profits from 2016 to 2018 or €1 billion in cash balances.⁹

Ernst & Young admitted that almost €2 billion in cash balances allegedly transferred by a Singapore bank to two Philippine banks had been rejected as spurious by those banks.⁹ At least half of Wirecard's business appears to have been fictitious, and the real business was reported by KPMG to have been unprofitable since 2016.⁹ CEO Braun was charged with crimes, COO Jan Marsalek disappeared, and the company declared insolvency.⁹ On June 18, 2020, Wirecard announced that auditors could not confirm the existence of €1.9 billion in cash on its balance sheet.¹¹ Wirecard filed for insolvency on June 25, 2020.⁶¹¹

The FCA ordered Wirecard UK to freeze all assets and services on June 26, 2020, affecting companies like Curve, ANNA Money, and Holvi.⁶ Holvi customers could use their cards again after the FCA allowed Wirecard Card Solutions to partially resume operations.⁶ Wirecard's remains were gradually sold piece by piece; Santander acquired parts of Wirecard's merchant services business and staff, and Railsbank acquired Wirecard's U.K. business.² Finch Capital acquired Wirecard's licenses in Asia Pacific and surrounding regions and used those assets to create NomuPay.² NomuPay raised $53 million in early June 2023 from Finch Capital, Outpost Ventures, and other firms.²

Insolvency proceedings over Wirecard were opened by the Local Court of Munich on August 25, 2020.¹⁷ Approximately 50,000 shareholders filed damages claims of about €8.5 billion in the insolvency proceedings.¹⁷¹⁸ The Munich Regional Court ordered former Wirecard board members to pay €140 million in damages plus interest on September 5, 2024.¹⁵ A German court said on February 28, 2025, that EY Germany cannot be held liable for damages in a lawsuit by former Wirecard shareholders.¹⁶ The German Federal Court of Justice ruled on November 13, 2025, that shareholders' capital market damages claims are subordinated equity claims in Wirecard's insolvency.¹⁷¹⁸

Legal outcomes

• chargedCEO Markus Braun was arrested and accused of having inflated the company's total assets and sales volumes.⁶
• filedBaFin filed criminal charges against two Financial Times journalists who had broken the whistleblower story.⁹
• convictedThe Munich Regional Court ordered former Wirecard board members to pay €140 million in damages for breaches of fiduciary duties.¹⁵
• dismissedA German court said EY Germany cannot be held liable for damages in a lawsuit by former Wirecard shareholders.¹⁶
• dismissedThe German Federal Court of Justice ruled that shareholders' capital market damages claims are subordinated equity claims in Wirecard's insolvency.¹⁷¹⁸

Where the founders are now

Former CEO Markus Braun has been in custody for four and a half years as of January 2025.¹⁵ Former COO Jan Marsalek is currently in hiding.¹⁵

Sources

2. Payments startup picks up Wirecard's pieces to enter Asia Pacific, American Banker, 2023-06-20
6. Holvi is back up and running after being forced to shut down its services because of the Wirecard scandal, FinTech Global, 2020-07-01
9. The Fall of Wirecard, CLS Blue Sky Blog, 2020-07-08
11. Wirecard – Funding, Valuation, Investors, News, Parsers VC
15. Germany: Wirecard board members liable for EUR 140 million, Global Litigation News, 2025-01-03
16. German court says EY not liable for damages in Wirecard ..., reuters.com, Feb 28, 20
17. S&C Publication: German Federal Court of Justice Decision on Wirecard Insolvency, Sullivan and Cromwell LLC, Nov 14, 20
18. Federal Court of Justice leaves Wirecard-shareholders out in the cold, Deloitte, Nov 13, 20

How this case file was put together

Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.

If a fact on this page is wrong, use "Report an error" below and attach the record that shows the correct fact. Every report is reviewed by a person before anything changes, and a corrected page says when it was last corrected.

All case files2020fintech