WIRECARD disaster: Internal whistleblower warned EY as early as 2016

Plaintiff representatives see tailwind for lawsuits against EY

With reference to an addendum to the KPMG report of April 27, 2020, the "Financial Times" reports that an EY-internal whistleblower had already warned of irregularities at WIRECARD in 2016. Specifically, the warnings dealt with a company acquisition in India and accusations of "roundtripping"; there had also been an attempt to bribe an EY auditor.

The Berlin lawyers Dr. Wolfgang Schirp and Dr. Marc Liebscher see themselves fully confirmed by this article. Dr. Wolfgang Schirp: "We have been filing claims for damages directly against EY on behalf of numerous investors since June 2020 at the Regional Court in Stuttgart. Our lawsuits are based on the fact that, according to our analysis, EY has audited alleged trust funds "into the blue" and has not uncovered further balance sheet manipulations at WIRECARD. The current coverage in the Financial Times now spectacularly confirms these assumptions".

Dr. Marc Liebscher: "We find the following circumstances particularly noteworthy: 1. the whistleblower came internally from EY: this means that the whistleblower's knowledge is initially attributable to his EY unit. 2. the headquarters of EY-Germany was informed by the whistleblower: This means that the German leadership of EY and thus the German EY inspectors of WIRECARD had to know about the information. The knowledge of the whistleblower is thus fully attributable to EY-Deutschland and the specific examiners. 3. the information did not come to EY from outside, but directly and internally through a separate employee. This made the allegations much more credible for EY-Deutschland. 4. the whistleblower informed that there had been attempts at bribery by WIRECARD's management towards EY employees. Therefore, the German EY management should have taken special care to conduct a careful and independent investigation. This puts the leadership of EY Germany in the spotlight: "What have they done to ensure a legitimate audit?

Dr. Wolfgang Schirp adds: "The whistleblower provided information about "round-tripping", which is one of the main tools used to inflate the asset side of the WIRECARD balance sheet. This was exactly the core of the accusations made against WIRECARD before. We also consider it essential that the EY investigation was stopped at "the behest of Marsalek". This means that Marsalek determined the scope and intensity of the audit, although accusations had just been made against his management in Asia by the EY employee/whistleblower. What did the individual members of the EY management in Stuttgart know about this?

Dr. Marc Liebscher: "EY's defense attempts ("we uncovered it"; "WIRECARD was so criminal that it could not be found earlier") are thus getting another crack. EY must explain in detail and in a comprehensible manner how they intend to prevent such mistakes from occurring again in the future. The APAS must expand its investigations at EY accordingly. In any case, we see a tailwind for our claims for damages in Stuttgart".

For further information please contact

Dr. Wolfgang Schirp, Schirp & Partner Rechtsanwälte mbB, Leipziger Platz 9, D - 10117 Berlin, Tel. 0049-30-3276170 and 0049-179-5320213, mail: schirp@schirp.com, URL: www.schirp.com

Dr. Marc Liebscher, Dr. Späth & Partner Rechtsanwälte mbB, Kurfürstendamm 102, D - 10711 Berlin, Tel.: 0049-30-88701617 and 0049-176-93150194, mail: marc.liebscher@gmx.net, URL: www.dr-spaeth.com