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Wirecard says it may be the victim of fraud after $2.1 billion goes missing

2020 6/22
Wirecard says it may be the victim of fraud after $2.1 billion goes missing

CNBC’s Annette Weisbach discusses the controversy surrounding German payments giant Wirecard.

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  • Alex Filip says:

    BABA

  • Samuel Hrmel says:

    Someone please tell me how a DAX member loses nearly 80% of mkt cap in less than two days? Seeing something Chinese like Luckin Coffee commit financial fraud doesn’t really surprise me. But how does a German company publish forge 1.9 billion euros just like that?

    • chantilly cream says:

      yes this is the European Enron 20 years after !!! EY is accountable for this mess, as well as BAFIN and the DAX index making company. Shame on them all

    • Steven says:

      cuz you’re racist, duh. financial fraud is committed by faking # which every company can do if top executives work together. you make it sound like Chinese companies are known for fraud when most biggest finance frauds are all from euro/US. You got 1 Luckin Coffee in past several years while in the same time there has been multiple financial fraud of equivalent sizes or larger with White CEO which you can’t acknowledge or recall instantly. that tells you how much you know, then again, racists being stupid don’t surprise me either. lol.

    • Jay G says:

      hhmm, let me see. VW scandal? Just because it is European does not make they are not capable of doing fraud. looks like Wirecard has been inflating sales figures and these accounting issues have been reported as early as 2019 but BaFin refused to investigate.

  • Gaming Tonight says:

    Going after the media – not the company. Another sign of corrupt government “owned” by global corporations…!

  • Mircea Pintelie says:

    everybody knows that those billions are some of the most slippery things in “existence”, fishes have nothing on them🤣🤣🤣

  • kang shinok says:

    European Enron?

    • Oldën Grimsey says:

      Goodbye EY Inc. 🙂

    • chantilly cream says:

      @Oldën Grimsey EY Germany is accountable for this mess !

  • Chad Bennani says:

    This lady talks too much and doesn’t say the most important: Which 2 banks failed to confirm the 1.9 billions to the auditors???

    • chantilly cream says:

      yes because Wirecard was not even a depositor at these two ! clearly Wirecard has fraudulous practices

    • beth m says:

      2 banks is in the philippines BPI and BDO but the 2 bank denied it, bec they said the documents of wirecard is fake.

  • Fizz Gelato says:

    This is why we need blockchain people will always bs numbers don’t lie

  • Phlegethon says:

    biggest risk is always insider risk

  • SpeedOfDarknesss says:

    Whoopsie fraud!

  • Kipton Hamilton says:

    The Securities and Exchange Commission’s Accounting and Auditing Enforcement issued the following order (No. 4146) involving Argo Group International Holdings:

    In the Matter of ARGO GROUP INTERNATIONAL HOLDINGS, LTD., Respondent.
    ORDER INSTITUTING CEASE-AND-DESIST PROCEEDINGS PURSUANT TO SECTION 21C OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS, AND IMPOSING A CEASE-AND-DESIST ORDER
    On the basis of this Order and Respondent’s Offer, the Commission finds1that:

    Summary

    This matter arises from Argo Group International Holding, Ltd.’s failure to disclose in its definitive proxy statements that, from 2014 through 2018, it paidover $5.3 million to its then Chief Executive Officer, President and member of its Board of Directors, Mark E. Watson III, in the form of a wide range of perquisites and personal benefits. In connection with this conduct, Argo violated Sections 13(a), 13(b)(2)(A), 13(b)(2)(B), and 14(a) of the Exchange Act and Rules 12b-20, 13a-1, 14a-3, and 14a-9 thereunder. In late 2019, Watson resigned and agreed to reimburse Argo for certain perquisites and/or personal expenses.
    Facts

    In definitive proxy statements disclosing executive compensation paid for 2014 through 2018, which were filed in 2015 through 2019, Argo disclosed a total of approximately $1.22 million worth of perquisites and personal benefits provided to Watson, with an annual average of approximately $244,000. The disclosed perquisites and personal benefits consisted predominately of 401(k) and retirement contributions, the imputed value of insurance coverage, supplemental executive retirement plan benefits, housing and home leave allowances, medical premiums and financial planning services.

    However, these same definitive proxy statements failed to disclose over$5.3millionworth of additional perquisites and personal benefits provided to Watson, thereby understating the perquisites and personal benefits portion of Watson’s compensation by an annual average of over $1 million, or 400%. Items that Argo paid for on Watson’s behalf, but did not disclose, include, but are not limited to, expenses associated with personal use of corporate aircraft, rent and other housing costs, personal use of corporate automobiles, helicopter trips, other personal travel costs, use of a car service by family members, club and concierge service memberships, tickets and transportation to sporting, fashion or other entertainment events,personal services provided by Argo employees,and watercraft-related costs.

    In February 2019, an Argo shareholder issued a press release in which it alleged, among other things, the misuse of Argo assets by Watson, including undisclosed personal usage of corporate aircraft. On April 12, 2019, during a proxy contest with this shareholder in connection with Argo’s May 2019 annual shareholders meeting, Argo filed a definitive proxy statement that failed to disclose over $1 million worth of perquisites, including over $230,000 related to Watson’s use of corporate aircraft.

    From 2015 through 2019, Argo incorporated its definitive proxy statements into its annual reports by reference.

    From 2014 through 2018, Argo incorrectly recorded payments for the benefit of, and reimbursements to, Watson as business expenses, and not compensation. As a result, its books, records, and accounts did not, in reasonable detail, accurately and fairly reflect its disposition of assets.

    In addition, Argo failed to devise and maintain internal accounting controls relating to payments for the benefit of, and reimbursements to, Watson that were sufficient to provide reasonable assurances that transactions were recorded as necessary to maintain the accountability of assets. These failures included, for instance, a practice of providing expense reimbursements to Watson without requiring an adequate explanation of a business purpose for the expense, allowing Watson to approve his own expense reimbursements, and a lack of a mechanism to ensure Watson paid for personal usage of corporate aircraft.

    Argo conducted an internal investigation, which was launched in June 2019afterreceipt of a subpoena from the Commission staff. Thereafter, Watson resigned and agreed to reimburse Argo for certain perquisites and/or personal expenses, subject to an arbitration process as to any items Watson disputes.
    Undertakings

    Respondent undertakes to cooperate fully with the Commission in any and all investigations, litigations or other proceedings relating to or arising from the matters described in the Order. In connection with such cooperation, Respondent undertakes:
    a. To produce, without service or notice of subpoena, any and all documents and other information reasonably requested by the Commission’s staff, with a custodian declaration as to their authenticity, if requested;
    b. To use its best efforts to cause Respondent’s current and former employees, officers and directors to be interviewed by the Commission’s staff at such times and places as the staff reasonably may direct;
    c. To use its best efforts to cause Respondent’s current and former employees, officers and directors to appear and testify truthfully and completely without service of a notice or subpoena in such investigations, depositions, hearings or trials as may be reasonably requested by the Commission’s staff; and
    d. In connection with any interviews of Respondent’s current and former employees, officers and directors to be conducted pursuant to this undertaking, requests for such interviews may be provided by the Commission’s staff by regular or electronic mail to Barry Rashkover of Sidley Austin LLP, or such other counsel that may be substituted by Respondent.

    In determining whether to accept the Offer, the Commission has considered these undertakings.
    Argo’s Remedial Efforts and Cooperation

    In determining to accept the Offer, the Commission considered remedial acts undertaken by Respondent and cooperation afforded the Commission staff. Specifically, Argo undertook remedial efforts including (i) engagement of outside counsel and an independent forensic accounting firm to conduct an investigation; (ii) engagement of a third-party consultant to assist in reviewing and revising its executive compensation process, policies and controls; (iii) replacing its Chief Executive Officer; (iv) entering into an agreement to obtain repayments from the former Chief Executive Officer; (v) implementing new internal controls and compliance policies and procedures concerning perquisites, airplane usage, expense reimbursement, travel, and charitable contributions; and (vi) changing the composition of its Board of Directors. In addition, Argo shared the results of its internal investigation with the Commission staff.

    IV.
    In view of the foregoing, the Commission deems it appropriate to impose the sanctions agreed to in Respondent Argo’s Offer.
    Accordingly, it is hereby ORDERED that:
    A. Pursuant to Section 21C of the Exchange Act, Respondent Argo cease and desist from committing or causing any violations and any future violations of Sections 13(a), 13(b)(2)(A), 13(b)(2)(B), and 14(a)of the Exchange Act and Rules 12b-20, 13a-1, 14a-3 and 14a-9 thereunder.
    B. Respondent shall, within 10days of the entry of this Order, pay a civil money penalty in the amount of $900,000to the Securities and Exchange Commission for transfer to the general fund of the United States Treasury, subject to Exchange Act Section 21F(g)(3). If timely payment is not made, additional interest shall accrue pursuant to 31 U.S.C. Sec.3717.

    Mr. Watson’s Personal Chariot

    Make: Gulfstream: 5

    Registration Number: N17ND

    Serial Number: 518

    Lessor: Jetaway Air Service of Muskegon, MI Monthly
    800 Ellis Road, Norton Shores, MI 49441

    Payment: $ 175,000 Hourly Reserve Payment: $ 1,250

    Average Monthly Payment to Jetaway Air Services (based on recorded flight hours) $250,000 to $300,000 (note: figure does not include crew salaries, airport fees, insurance, and fuel)

    4 to 5 million expensed to Argo shareholders each year for Mark Watson’s Personal Chariot – G5.

    Jet Broker:
    Jet Evolutions LLC
    15199 Omega Court
    Waterford, VA 20197
    Commission: $500,000 (The Deposit Paid to Jetaway, presumably with Argo Shareholder funds)

  • YoutubSUCKZ says:

    “victim” ROTFL

    • chantilly cream says:

      how dare they to call themselves the victim in this case !!!!

  • D Nahil says:

    She talks too much about nothing; what a waste of time. I would never use her for financial analysis.

  • KM Tang says:

    Total bullshit. How can CEO resign now? Why is his sense of responsibility?
    I worked in a listed co before. The seven operating business units every week sees the CEO for sales nos update, aging updates, and pipeline prospects update. The CEO knows all the financial nos to the dot each time. Here u have the CEO blaming others. Laughing cow. Hope it happens only in germany.
    think not so.

  • Søren Kristensen says:

    Analog glich 🙂

  • Artur says:

    the victims are those who have lent them the money and the small shareholders.
    Little thieves the CEOE

  • Artur says:

    put everyone (CEOE, board of directors, and senior managers of the company…) in jail until they return the last euro

    • Jay G says:

      there wasn’t any money to begin with. It looks like they were inflating sales and it stacked up.

    • Artur says:

      @Jay G THEN THAT ROUTE CAN HAVE THE ACTION, I think they cannot just throw it away, a company with more than 5000 employees and supposedly valued at 12.4 billion euros

  • fat matt says:

    HAHAHAAAA…
    2 BILLION?????
    AS IN … BILLION????
    HAHAHAAA…RENAME IT …AND MAKE IT THE MOVIE
    WILD CARD…

  • fat matt says:

    Due in… 2024??????? Hahahaaaaa….
    5 billion loss and no one is found dead yet? Def a group effort ….

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