BaFIN Blames Employee for Wirecard Insider Trading

The regulator suspended the employee and also filed a criminal complaint.

Germany’s Federal Financial Supervisory Authority (BaFIN) has filed a criminal complaint against an unnamed employee for involvement in insider trading in the now-collapsed Wirecard, the regulator announced on Thursday.

The employee, working at the securities supervision department of the regulator, sold structured products of the payments firm on June 17 last year, a day before the public revelation of the missing 1.9 billion euros from the company’s books.

BaFIN has already suspended the employee and opened disciplinary action against the person.

The German government earlier revealed that several BaFIN employees bought and sold Wirecard shares before its demise.

Doom of a Giant

The high-flying German fintech, Wirecard collapsed as its auditor could not find 1.9 billion euros in cash in the books. This was followed by the stepping down of the company’s long-running CEO, Marcus Braun and also his arrest.

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The company entered into liquidation on June 25. Several international divisions of the company were already acquired.

Though the GermanFinance Minister initially applauded BaFIN for handling Wirecard’s collapse, the regulator later faced harsh criticism for its role and the involvement of its employees in insider trading, making the situation worse.

“The finance ministry saw no need to take action on insider trading at the supervisory authorities at the outset of the Wirecard scandal,” German lawmaker, Fabio De Masi said. “There is still a need to apply stricter EU rules on insider trading to German authorities. We need rules for ministries and the Bundestag.”

Apart from the regulatory employee, many others are suspected to have been involved in insider trading with Wirecard shares. BaFIN earlier asked the prosecutors to open an investigation on possible insider trading, citing a post by an individual on an online forum eight days before the auditor’s report.

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