This archive report was first published on 25 June 2020.
On June 25, 2020, the German finance firm Wirecard filed for administration, citing impending insolvency and over-indebtedness.
Finance Minister Olaf Scholz described the scandal as a 'wake-up call' that highlights the need for more oversight and controls over financial firms.
Wirecard's former CEO Markus Braun was detained on suspicion of falsifying accounts before being released on bail, sparking memories of the Enron accounting scandal in the United States.
Auditing company EY accused Wirecard of carrying out fraud on a global scale, stating that it had been given false statements when it was reviewing the firm's 2019 accounts.
Wirecard's shares collapsed after trading resumed, closing at 3.53 euros, down from around 100 euros just over a week ago.
Founded in 1999, Wirecard rose from a company piping cash to porn and gambling sites to a respected electronic payments provider that edged traditional lender Commerzbank out of the DAX 30 index.
However, questions emerged about accounting irregularities in its Asian division in January 2019, leaving Wirecard's stocks on a rollercoaster ride for several months.
The final nail in the coffin came when auditors Ernst & Young said they were unable to find 1.9 billion euros of cash in the company's accounts, which was meant to cover risks in trading supposedly carried out by third parties on Wirecard's behalf.
Prosecutors believe Braun artificially 'inflated' the company's assets and revenues through 'fake transactions with so-called third party acquirers'.
