Wirecard scandal: What investors can learn from 2020

The Wirecard case, often called an accounting scandal, concerns a German public limited company that joined the DAX in 2018. In June 2020, Wirecard filed for insolvency after stating that EUR 1.9 billion in trustee accounts probably did not exist. The criminal trial is still ongoing (as of 8 October 2026). The presumption of innocence applies until a final judgment is issued. This means that nobody is considered guilty until a court has established guilt in a final judgment. Final means that it can no longer be appealed.

This article describes the sequence of events and the connections between them. It does not address the question of guilt. It is a German case under German law and German supervision.

What was the Wirecard scandal?

The name stands for events that are often described as an accounting scandal. On 18 June 2020, Wirecard postponed the publication of its annual accounts. Four days later, the management board stated that the balances of EUR 1.9 billion probably did not exist. These were balances in trustee accounts, that is, accounts held with third parties. On 25 June 2020, the management board resolved to file for insolvency. Insolvency means that a company can no longer pay its debts.

According to SRF (22 June 2020), Swiss pension funds reportedly also held Wirecard shares.

How did Wirecard rise into the DAX?

Wirecard joined the DAX on 24 September 2018. According to SRF, the company was then worth around EUR 24 billion on the stock market. Market capitalisation is the price of all shares combined. Past price movements are not a reliable indicator of future results.

One part of the business was called "third party acquiring", that is, business conducted through third-party partners. According to SRF, Wirecard provided software to local providers in Asia for a fee. According to Wirecard (22 June 2020), earlier descriptions of this business were not correct. According to Wirecard (22 June 2020), it was being examined whether and to what extent this business had actually been conducted for the benefit of the company.

What happened from the first reports to the insolvency?

At the end of January 2019, press articles appeared about allegedly manipulated bookkeeping at a subsidiary in Singapore. This is according to BaFin. The share fell from an opening price of EUR 167.00 (30 January) to a closing price of EUR 99.90 (15 February 2019). According to BaFin, market capitalisation dropped by around 40 per cent. Past price movements are not a reliable indicator of future results.

In June 2020, events followed within days. The data come from Wirecard's mandatory announcements. According to Wirecard (18 June), the auditor had, as an interim position, not yet obtained sufficient evidence for balances of EUR 1.9 billion. If no audited annual accounts were available by 19 June, loans of around EUR 2 billion could be terminated, according to Wirecard. According to SRF, market capitalisation stood below EUR 2 billion on the evening of 22 June. Past price movements are not a reliable indicator of future results.

The Munich Local Court reported receipt of the application on 26 June 2020. It appointed an expert, that is, an assessor. According to Wirecard, the court opened the proceedings on 25 August 2020.

Wirecard left the DAX as of 24 August 2020. The index provider STOXX had changed its rules. According to STOXX, companies in insolvency proceedings have left the DAX since the rule change of August 2020. According to STOXX (19 August 2020), market capitalisation was EUR 13 billion in mid-June 2020 and EUR 163 million in August. Past price movements are not a reliable indicator of future results.

What does an audit opinion say, and what does it not say?

According to § 322 HGB, an unqualified audit opinion states that the audit led to no objections. The annual accounts comply with statutory requirements and are meant to give a true and fair view. The law also provides for qualified opinions and two forms of refusal.

In the Wirecard case, the issue was balances held with third parties and recognised as assets. According to Wirecard (18 June 2020), the auditor EY had not yet obtained sufficient evidence for them. There were also indications that incorrect balance confirmations (confirmations of account balances) might have been presented to the auditor. This is an interim position according to Wirecard, not a final result. Without audited annual accounts, the termination of loans was a threat. An audit opinion therefore has consequences for financing and confidence.

What did the supervisor do?

On 18 February 2019, BaFin issued a general order (an official order that applies to everyone affected). For two months, it banned the creation or increase of new net short positions in Wirecard shares. These are bets on falling prices. Market making was exempt. This means quoting buy and sell prices so that trading can take place.

BaFin justified this by pointing to sharply increased positions since the beginning of February 2019. It feared sharp price swings and a loss of confidence in the market. The order applied to Wirecard only. A supervisor can therefore intervene in the market without making any statement about the accounts.

What does the indictment allege?

The Munich I public prosecutor's office filed charges on 10 March 2022. They are directed at the former chief executive, the former head of accounting and a former managing director of a subsidiary.

According to the indictment, the consolidated financial statements (annual accounts of the whole group) for 2015 to 2018 misstated revenue. The related balances did not exist. According to the indictment, three further allegations were added: market manipulation in 26 cases (improper influence on stock market prices), breach of trust in six cases (damaging assets entrusted to someone) and commercial gang fraud in six cases (fraud committed repeatedly and by several people acting together). Banks allegedly paid out loans of around EUR 1.7 billion and subscribed to debt securities (bonds) of around EUR 1.4 billion.

The public prosecutor's office stresses that the suspicion still has to be proven in court. According to LTO (23 July 2026), the former chief executive denies all allegations. According to dpa (8 October 2026), the Regional Court Munich I rejected a defence motion for a stay of proceedings on the 285th day of the trial. It aims to hear the closing arguments in November 2026. There is no verdict. The presumption of innocence applies until a final judgment is issued.

What changed after the Wirecard scandal?

The Bundestag set up an investigative committee and took note of its report on 25 June 2021. The Bundestag passed the Act to Strengthen Financial Market Integrity (FISG) on 20 May 2021. According to the Bundesrat, it has been in force since 1 July 2021 (as of 8 October 2026).

According to the Bundestag (20 May 2021), the act consolidates accounting enforcement at BaFin. According to the Bundestag, companies with exchange-traded securities must change their audit firm after ten years. According to the Bundestag, audit and advisory work are separated more strictly, and auditor liability is tightened.

What does the case teach investors?

The sequence of events shows connections, not recipes.

• The Wirecard case involved confirmations from third parties. According to Wirecard (18 June 2020), the auditor had, as an interim position, not yet obtained sufficient evidence for balances held with trustees.
• Index membership follows rules. In the Wirecard case, the exit from the DAX followed a rule change by the index provider STOXX concerning companies in insolvency proceedings.
• Supervisory measures and audit results are different things. The 2019 ban concerned trading in the share.
• A single share carries concentration risk. This is the risk that a large part of one's assets depends on a single holding. The article on diversification explains how risks are spread across several investments.

What risks remain with individual shares?

• Total loss: In an insolvency, a share can lose almost everything. According to the German Federal Court of Justice press release (13 November 2025), shareholders' claims rank behind those of ordinary creditors. According to the same press release, around 50,000 shareholders filed claims of around EUR 8.5 billion. All claims filed amounted to around EUR 15.4 billion. The insolvency estate, that is, the assets available for distribution, stood at around EUR 650 million.
• Concentration: Anyone who invests heavily in one holding shares its fate.
• Limits of audit opinions and supervision: According to Wirecard (18 June 2020), the auditor had, as an interim position, not yet obtained sufficient evidence for balances held with third parties.
• Dependence on the company: With the Lehman certificates in 2008, too, a promise depended on the condition of a single firm.
• Ongoing proceedings: A first-instance judgment would not be final.

This article is a general, historical account. It is not investment, legal or tax advice. The situation in individual cases may differ. As of 8 October 2026.

Conclusion

The Wirecard scandal shows how quickly a company's statements can change. In June 2020, within one week, the company announced that its annual accounts would be late, that balances of EUR 1.9 billion probably did not exist and that it was filing for insolvency. In the Wirecard case, the 2019 ban concerned trading in the share, and the exit from the DAX followed a rule change by STOXX. A single share can lose a great deal of value. The criminal trial is ongoing, and the presumption of innocence applies until a final judgment is issued.