Possible to register for Wirecard model case proceedings until September

News  >  Possible to register for Wirecard model case proceedings until September

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APAS, the public body in Germany that provides regulatory oversight of auditors of annual accounts, has found that the auditors at EY who were tasked with inspecting Wirecard’s accounts failed to fulfill their professional obligations.

The Wirecard scandal blew up in 2020 when it became known that nearly two billion euros had either vanished from the Group’s balance sheets or never existed in the first place. This is despite the fact that the auditors from EY had been issuing audit opinions for the annual financial statements of the now insolvent Wirecard AG for years. Germany’s APAS has since determined that these auditors failed to live up to their professional obligations when auditing Wirecard’s accounts. It has therefore imposed severe penalties on the auditing company, including a 500,000 euro fine and a ban on accepting assignments to audit public interest entities for a period of two years.

Those Wirecard investors who have been affected may be wondering whether they can now sue the auditors at EY for compensation. While the decision taken by APAS is not legally binding on other proceedings related to the Wirecard scandal, the auditors from EY clearly failed to fulfill their auditing obligations and yet continued to issue audit opinions, which can be an important factor for potential investors when deciding whether to make an investment. Indeed, Munich’s higher regional court – the OLG München – confirmed as much in a court order from December 9, 2022 in finding that there is a causal relationship between audit opinions and the decision whether or not to invest.

Aggrieved Wirecard investors have the option of bringing an individual action or joining a class action lawsuit. German capital markets law makes provision for model case proceedings in Germany’s Act on Model Proceedings in Capital Market Disputes (KapMuG), notes commercial law firm and capital markets specialist MTR Legal Rechtsanwälte.

One aspect that Wirecard model case proceedings ought to bring clarity to is whether the auditors are liable to pay compensation to the shareholders. It should be noted, however, that the ruling will initially only be binding on the lead petitioner as well as the defendants, though it will subsequently be applicable to those who joined the model case proceedings at a later date.

It remains possible to register to take part in the proceedings until September 18, 2023, and it is imperative that this be arranged by a lawyer.

Wirecard investors can turn to MTR Legal and its team of well-versed capital markets experts for advice.

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