German Prosecutors Launch Investigation Into Wirecard Reporting Of Financial Times Journalist


Prosecutors in Munich, Germany have launched a probe into a journalist who is working for the Financial Times (FT) after his reporting of the alleged fraud at Wirecard prompted a frenzy of short selling of the shares of the company.

A series of stories were published by the FT. The stories exposed the alleged fraud that was supposedly happening at the Singapore office of Wirecard and a probe that was launched by the local police. It caused the shares in the fintech firm to plunge and resulted in a surge in investors betting against it.

Today, however, Munich prosecutors said that they had also launched an investigation into possible market manipulation by a reporter at the newspaper after an official criminal complaint was filed.

The FT has since denied any wrongdoing by its employee and described the accusations as a “smokescreen” that is designed to discredit its reporting.

In a statement, the company stated: “Any allegation against the FT or any of its reporters or staff of market manipulation or unethical reporting in relation to Wirecard is baseless and false.”

A spokesperson for the public prosecutor’s office in Munich chose not to disclose any information regarding the nature of the investigation, however, he said that it formed part of an ongoing probe into Wirecard.

The inquiry came as Bafin, the German financial regulator, banned all short selling on the digital payments company amid concerns that the volatility of the stock was affecting market confidence.

Bafin said that there had been a substantial increase in the net short positions in shares of Wirecard in the past days and it prevented investors from establishing or increasing a short position until the 18th of April.

Wirecard has also denied the accusations of fraud. It said that an internal investigation discovered no evidence of wrongdoing.

Today, shares in Wirecard rose by more than 15 percent after the ban was imposed.