Big Short: Fintech Fraud Wirecard Explained (EY Accounting Scandal)

Eddie Donmez takes a look at the German Payment processing Fintech- Wirecard. He dives into the 15-year long accounting fraud that saw €1.9bn go missing and draws parallels to previous scandals like Lehman Brothers and Enron. Are there more FinTechs out there that have grown too quickly and let there standard slip?

In this session Eddie covers the following:

– Introduction: Who are Wirecard? (0:00)
– Lehman’s Brothers and Enron (2:25)
– Timeline of events (04:20)
– Shorts made a killing .6bn (05:37)
– EY Sued (06:30)
– CEO Arrested & Insolvency (07:39)
– Rating Agencies didn’t spot it either (10:00)

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20 thoughts on “Big Short: Fintech Fraud Wirecard Explained (EY Accounting Scandal)

  1. Hey guys and girls HAPPY SATURDAY! I had to cover this one, didn’t I?!

    Do comment below, who do you think is the biggest guilty party: the accountants, the rating agencies, the management, incentive structures, or simply everything in between?

    Have a lovely weekend and enjoy the cooler temperatures- after delivering to our Summer Programme and Masters in Finance students at Loughborough University all week in the intense heat- I’m definitely looking forward to a chilled weekend!

    Take Care, Edd

  2. The short sellers were ultimately right and the German regulators who refuse to believe FT articles (and limited short selling on the stock cos Wirecsrd was complsin were shown to be idiots.

  3. Great video – much appreciated.

    Just for clarity, despite all the current information about Wirecard – shares are still in demand. Is Wirecard AG shares will be suspended/delisted from the stock market in the nearest future? Is there any possible way of doing/continuing business in smaller scale? Mention that Company has restructured its team for vision.

  4. Googled about the scandal, reached this video. Really great information. Pop quiz: How many times the word "essentially" was used? 😅😆

  5. This is F'd up. Just read the comments the amount of consumers that have had money stolen from them is disgusting.

  6. It is assumed that the balances are deposited in a bank in the United States (First Century Bank), they would have no problems and if there were Mastercard's they would have to be responsible for solving by supporting the balance of their cards, since Wirecard is the intermediary between which you deposit and Mastercard , the balance is the responsibility of the issuer of Mastercard's or Visa cards. at the time it is deposited.

    In Payonner's case, the problem will affect future payments, but the solution would be to continue processing payments without the Wirecard intermediary.

    The problem is complex but Wirecard is not necessary for the payonner to continue operating this intermediary towards the commission for the use of the services out of cost and to have to divide the profits between P + Wirecard + M.

    At the moment, we have to wait for the North American banks to provide a solution or at least to rule (First Century Bank).

    Before we clients directly sue Payonner and Mastercard

    It should be noted the responsibility that Mastercard's and First Century Bank have in all this, something that is little talked about but is a reality.

  7. I think that EY did an great job. They found and reported the fraud which then led to the appropriate investigations and discoveries. FinTech stocks have been booming, and startups are always risky business.

  8. I'm sure wirecard was a money laundering scam supported / needed by Mr. Duterte, no way officials faked documents just like that. The dictator needs useful idiots, as always.

  9. China can not even stand still Kept expanding, no foundation, no knowledge no base, definately debt !!!

  10. I like Fintech, but boy is it the wild west. I can't imagine Wirecard will survive this Fraud. Trust is #1 most important aspect of finance. If you can't trust where you money is going, that's it. Over. All the IP in the world won't save them from this breach of trust. Only an idiot would use them in the future or partner with them

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