Article: EU Watchdog Told To Crack Down After Wirecard Scandal

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EU Watchdog Told To Crack Down After Wirecard Scandal

Najiyya Budaly, 01 March 2021

The European Union’s markets watchdog must improve its supervision of national regulators, a technical advice group said on Monday after it found that Germany’s largest post-war accounting fraud had laid bare deficiencies in the authority’s oversight of market abuse and auditing rules.

The Securities and Markets Stakeholder Group, which provides advice on policy development to the European Securities and Markets Authority, recommended that ESMA should improve protection for investors and ensure integrity in markets after an accounting scandal at Wirecard AG revealed gaps in its supervision.

“The magnitude of the case and its impact on a wide range of areas require forward-looking responses [from ESMA]…where investor protection and market integrity are core objectives,” the group said. “This report has pointed to a number of serious problems in the supervision of Wirecard.”

The payments company collapsed after auditor Ernst & Young refused to sign off its 2019 books because it could not account for a missing €1.9 billion ($2.3 million). Wirecard later concluded that it was likely that the money did not exist.

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