Wirecard
A DAX 30 company fabricated €1.9B in cash that didn't exist. Auditors (EY) failed for years to catch it.
2002 → 2020
$1.8B+
Fintech/Payments
Germany
IdeaProof AI Failure Score
What Happened: The Timeline
2002
Wirecard AG incorporated in Germany
2018
Joins DAX 30 index, replacing Commerzbank — peak prestige
2019
SoftBank invests €900M via convertible bond
Jan 2019
FT publishes exposés on accounting irregularities in Asia
Jun 18, 2020
EY refuses to sign off accounts: €1.9B cash is missing
Jun 25, 2020
Wirecard files for insolvency. CEO arrested.
Root Causes
Wirecard was a German payments processor that reached a €24B market cap and joined the prestigious DAX 30 index. In June 2020, auditor EY revealed that €1.9B in cash balances — representing a quarter of the balance sheet — "probably never existed." CEO Markus Braun was arrested; COO Jan Marsalek fled and remains a fugitive linked to Russian intelligence. The scandal was Europe's largest post-war financial fraud. FT journalist Dan McCrum had been reporting on irregularities since 2015, but German regulators (BaFin) investigated the journalist rather than the company. The lesson: when short-sellers and journalists raise alarms, regulators should investigate the company, not the whistleblowers.
Key Lessons Learned
1. Auditors can fail spectacularly
EY audited Wirecard for over a decade without verifying €1.9B in cash. Trust but verify — especially auditors.
2. Regulators can be captured
BaFin banned short-selling of Wirecard stock and investigated journalists instead of investigating fraud allegations.
3. Persistent whistleblowers are critical
FT's Dan McCrum reported on Wirecard fraud for 5 years before the collapse. Investigative journalism saved future investors.
Competitors That Won
Adyen
€45B+ market cap, profitable, serves Netflix/Uber/Spotify
Why they won: Genuine technology platform, transparent financials, organic growth
Stripe
$50B+ valuation, dominant online payments
Why they won: Developer-first approach, real product innovation, strong governance
Frequently Asked Questions
Sources & References
Could This Failure Have Been Prevented?
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