For years, EY had examined the fraudulent balance sheets of the payment processor Wirecard and did not raise any objections. That’s why over 13,000 investors have now filed a lawsuit – and are demanding damages amounting to 700 million euros.
After the collapse of the payment service provider Wirecard, the German Association for the Protection of Securities Holdings (DSW) filed a claim for damages against the auditor EY on behalf of more than 13,000 institutional and private investors. The volume is over 700 million euros, said DSW.
The 80,000-page lawsuit with attachments was filed with the Munich Regional Court. The costs of the lawsuit will therefore be borne by British litigation financiers who, if successful, will receive part of the money sued for. Thanks to their involvement and a Dutch foundation model, investors would have no risk.
EY could have “easily detected” fraud
DSW lawyers Klaus Nieding and Andreas Lang explained that EY had failed to convince itself of the existence of the third-party business through its own checks. Instead, the responsible auditors relied on the statements of Wirecard management. “In addition, EY could have determined relatively easily that the 1.9 billion euros did not exist, because the special auditors from KPMG later found that out very quickly.”
The payment service provider Wirecard, which was listed in the DAX at the time, collapsed in 2020 after 1.9 billion euros that were supposedly booked in escrow accounts could not be found. Former boss Markus Braun and two other ex-managers are in the dock for falsifying accounts and gang fraud. The auditor EY, which had checked the balance sheets of the group from Aschheim near Munich for years, did not want to comment on the lawsuit.
According to a newspaper report, Wirecard insolvency administrator Michael Jaffe has also sued the auditing company for damages. A spokesman did not give any details to the “Handelsblatt”. The lawsuit was filed with the Stuttgart Regional Court this year in order to prevent the statute of limitations from running out. Jaffe believes it has been proven that the third-party business with alleged partners in Asia was fabricated.