The district court of Munich has launched an investor trial case against EY. The role of auditors in the Wirecard scam is now to be clarified centrally.

All claims for damages against Auditor EY in connection with the Wirecard bankruptcy are bundled. The Munich Regional Court has decided that EY will face a type of class action lawsuit under the Capital Investor Model Proceedings Act (KapMuG). The Bavarian Supreme Regional Court is responsible for the proceedings. It now needs to be clarified whether EY has breached a duty while auditing payment service provider Wirecard’s balance sheet, which may justify claims of damages by investors and institutional investors.

Arne Meyer-Funfinger
ARD Capital Studio

thousands of lawsuits suspended

As a result of the launch of the trial case, the ongoing lawsuits against EY regarding Wirecard will be suspended for the time being, meaning thousands of trials will not run in parallel in the future. The process now clarifies the essential questions for investors.

According to the decision of the Munich Regional Court, it is about the so-called main crime – that is, the question of whether Wirecard presented false balance sheets under CEO Marcus Braun. Central to another part of the process is the question of what role did EY’s auditors play and whether they acted as intended.

It must be determined, for example, whether the auditors accepted false balance sheets because they did not request original receipts for so-called trust accounts for third-party transactions. The trust’s accounts in Singapore and later in the Philippines are said to be worth 1.9 billion euros. However, it has now become clear that the money never existed. EY has repeatedly emphasized that the company has checked the Wirecard balance sheet to the best of its knowledge and belief.

Law firm received order

have influenced the decision on the test case, BR Research Available at, TILP, the law firm of Kirchantellinsfurt in Baden-Württemberg. According to TILP, such processes increase the chances of success for investors because they combine strength and save costs. Smaller investors can also benefit from a comprehensive process that otherwise usually only institutional investors can afford.

Aggrieved investors who have not sued yet can also file their claim through an advocate in the model proceedings. As a result, the statute of limitations for potential claims is constrained in a cost-effective manner.

On the other hand, critics of KapMuG’s proceedings complain that these often take a long time. In December last year, the proceedings against Deutsche Telekom ended with a settlement motion for the plaintiffs after nearly 20 years. However, another advantage is that all lawyers can pool their expertise and take joint action against the defendant.

Former Wirecard boss Braun also in focus

The Wirecard sample test is directed not only against auditor EY, but also against Marcus Braun, the former CEO of Wirecard. This is a civil claim for damages.

On Monday, the Public Prosecutor of Munich did against it Brown and two other suspects filed charges, She accuses Braun of infidelity and commercial gang fraud, among other things. In criminal proceedings, Brown faces a long prison sentence. However, his defense counsel has denied all the allegations.