From: RegTech Analyst
The problems are growing for Wirecard as Rosen Law Firm is calling for people to join its class action lawsuit against the collapsed FinTech giant.
The global investor rights law firm is looking for people who bought Wirecard securities between August 17, 2015 and June 24, 2020, one day before the company filed for insolvency after an alleged multi-billion fraud was exposed.
People wishing to join the class action suit have until September 8, 2020 to make themselves known to the firm. The lawsuit seeks to recover damages for Wirecard investors under federal securities laws.
The lawsuit alleges that Wirecard made false and misleading statements that failed to disclose how the business overstated its cash balances during the period in question.
Rosen Law Firm is also taking aim at the company claiming it had €1.9bn ($2.1bn) of cash in a trust account that was missing, the reveal of which was what made auditor EY refuse to sign off on its audit, ultimately leading to the business going bust.
Moreover, Rosen Law Firm also claims that Wirecard overstated its financial results, including revenue and EBITDA as well as failing to put in place adequate risk management or countermeasures.
The lawsuit also alleges that Wirecard’s auditor failed to audit the company in accordance with applicable auditing principles, arguably resulting in “defendants’ statements about Wirecard’s business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times,” which led to investors losing money when the truth became common knowledge.
Rosen Law Firm is no stranger to going up against big financial institutions. The firm was one of the companies who sued Australian bank Westpac after the lender was accused of breaching anti-money laundering and counter-terrorism financing regulations.
Since the implosion of the German payment business, it has become clear that the Wirecard scandal could have long-lasting effects on the FinTech sector.
In the aftermath, regulators have been called to double down in their scrutiny of the FinTech sector, several top executives have been arrested or are wanted by authorities, and the businesses using Wirecard’s solutions found themselves momentarily unable to provide their services after the Financial Conduct Authority ordered Wirecard UK to freeze all of its assets and regulated activities.
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