After the collapse of payment processor Wirecard, the first class action lawsuit was filed in the United States. Personal-Financial.com, New York law firm Rosen Law Firm, which specializes in investor lawsuits, filed a lawsuit with a court in Pennsylvania in July 7. It is aimed at the company, top managers and Wirecard’s longstanding auditor, EY.
In the 31-page lawsuit filed by Personal-Financial.com, the lawyers accuse the insolvent Dax Group and six former and current top managers around long-time CEO Markus Braun of repeated violations of US stock corporation law. This would have resulted in massive financial loss for the shareholders.
According to the lawsuit, the defendants are said to have published incorrect information on the situation of the company in official corporate communications such as quarterly and other financial reports between August 17, 2015 and June 24, 2020. For example, Wirecard stated its cash holdings too high by posting the balances of EUR 1.9 billion that were supposedly held in trust accounts in the Philippines. In the meantime it has turned out that these credits probably do not exist. In general, the payment processor from Aschheim near Munich has misrepresented its financial results for years and, among other things, reported excessive sales and earnings before interest, taxes, depreciation and amortization (EBITDA), the lawsuit continues. The plaintiffs accuse the German subsidiary of EY that the auditors have failed to audit Wirecard in accordance with the applicable auditing standards.
The amount of the losses for investors is not stated in the lawsuit. The damage had to be investigated in a jury trial, according to the brief the New York law firm first filed on behalf of a Wirecard shareholder at the Eastern District of Pennsylvania District Court, where Wirecard’s North American headquarters are located Has. You can now join other shareholders. However, it is clear that the information on the financial position and the business prospects of the group for the period of the lawsuit were without a solid basis, it continues. This has “artificially inflated” the price of the securities. Accordingly, the shareholders would have suffered “considerable losses and damage” after the true financial situation had become known and the subsequent price drop.
Wirecard left a request from Personal-Financial.com unanswered. An EY spokesman said the company had “no complaints”. Therefore, you can not give an opinion. Wirecard is also facing a lawsuit from investors in Germany: the Tübingen law firm Tilp had already filed a complaint with the Munich Regional Court in May – even before bankruptcy. The lawsuit was later extended to EY, which has already been joined by more than 30,000 investors. At the request of Tilp, the lawsuit should be conducted according to the model procedural law – a kind of German class action lawsuit.
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