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Wirecard compliance scandal: TILP files first investor lawsuit on May 12th, 2020.

Wirecard compliance scandal:

  • TILP files first investor lawsuit on May 12th, 2020, while also seeking the establishment of a model case before the Regional Court of Munich I
  • Losses suffered by stockholders assessed at 32% of the respective purchase price
  • Platform available for investors to register, free of charge, at

Kirchentellinsfurt, May 13th, 2020

The Tübingen law firm of TILP Rechtsanwaltsgesellschaft mbH (TILP), which has been specializing in banking and capital markets law for more than 25 years now, filed the first investor lawsuit against Wirecard AG (Wirecard) yesterday with the Regional Court of Munich I, acting on behalf of its client Effecten-Spiegel AG.  Concurrently, TILP filed an application for the establishment of a model case in accordance with the Kapitalanleger-Musterverfahrensgesetz (“KapMuG,” Act on Model Case Proceedings in Disputes under Capital Markets Law) before the Higher Regional Court of Munich.

Wirecard, a company from Aschheim near Munich and a constituent of the “DAX 30” stock market index, is a payment services provider active across the globe.  For several years now, Wirecard has been criticized for what are referred to as “accounting irregularities.”  The company suffered several sharp drops of its trading price by double-digit percentages following the publication of dossiers and articles, particularly by the British daily Financial Times.  As a consequence, Wirecard itself instructed the renowned auditing firm KPMG in October of 2019 to perform an independent investigation of the allegations.  Following several postponements of the date for which its delivery had been announced, the report was published on April 28th, 2020.  In it, KPMG highlighted deficiencies in the internal Wirecard organization and revealed that it had faced obstacles in its probe.  As a consequence, KPMG was unable to provide any specifics on the existence of sales revenues generated by certain business relationships with Wirecard or regarding their amount, for example.  Thereupon, the Wirecard shares plummeted, with the share price falling by around 40% at times.  This alone meant that for a certain period, more than EUR 5 billion of market capitalization had been destroyed.

“The KPMG report has corroborated our firm conviction that Wirecard had and still has a massive compliance problem on its hands – which is something of which Wirecard ought to have informed the capital markets in due time,” says Maximilian Weiss, attorney with the TILP group of law firms.  “Enough now truly is enough.  At this juncture, we have compiled all of the legally relevant facts and we also have available the evidence underpinning them, and that is why we believe the action we have brought has high prospects of succeeding,” Weiss explains.

TILP is asserting what are known as “out-of-pocket damages” pursuant to Section 97 of the German Securities Trading Act (WpHG) before the Regional Court of Munich I on behalf of the plaintiff, Effecten-Spiegel AG, who purchased stock in Wirecard in 2019.  As its grounds for filing suit, TILP cited Wirecard’s concealment from the capital markets of the serious deficiencies in its compliance system.  In this context, TILP estimates the damage caused to investors to amount to at least 32.07% of the respective buying price paid by the plaintiff per share.

TILP is proceeding on the basis of its firm legal conviction that Wirecard AG is liable to compensate its stockholders for damages in light of a number of incorrect or incomplete disclosures to the capital markets, respectively for its failure to make such disclosures.  At the least, all purchases of stock made in the period from February 24th, 2016, until April 27th, 2020, are affected.  In the law firm’s assessment, those investors who were still holding the stock on April 27th, 2020, are entitled to damages, as are those who had already divested themselves of the stock at a loss.

“At the same time we filed the suit, we requested the establishment of a model case in accordance with the Kapitalanleger-Musterverfahrensgesetz (“KapMuG,” Act on Model Case Proceedings in Disputes under Capital Markets Law) before the Higher Regional Court of Munich.  Proceeding in this way significantly increases the prospects of a successful outcome for plaintiff investors and reduces their cost risk, and at the same time puts maximum pressure on the defendants,” is how attorney Andreas W. Tilp, managing director of TILP, explains the strategy pursued by the law firm in these proceedings.

The law firm of TILP specializes in pursuing model case proceedings brought under the Capital Markets Model Case Act (KapMuG).  This particular act was created as a consequence of the actions brought by TILP in 2001, as the first law firm in Germany, in the case against Deutsche Telekom in order to bundle a large number of plaintiffs in a single model case proceedings.  It is a type of “German class action suit for capital investors.”  Among other clients, the law firms making up the TILP group represent the respective model-case plaintiffs in the DT3 proceedings against Deutsche Telekom AG, against the corporation formerly doing business as Hypo Real Estate Holding AG (HRE), against Volkswagen AG, and against Steinhoff International Holdings N.V. (Steinhoff).  In October of 2014, the Federal Court of Justice ruled on the “DT3” case in favor of the model-case plaintiff, and in December of 2014, the Higher Regional Court of Munich did the same in the “HRE” matter.  The KapMuG case brought with the Higher Regional Court of Frankfurt in the wake of the Steinhoff accounts scandal currently has been suspended to allow settlement negotiations to be pursued.

TILP has created a platform,, on which investors may register, free of charge, in order to obtain further information at no cost.

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