Wirecard and European Company and Financial Law

Abstract

Wirecard constitutes not only a major scandal in Germany but also touches some fundamental concepts of European corporate and capital market law and will therefore dominate the discussion for further reforms for several years. This discussion will touch general questions of corporate governance, the examination of financial reports, the role of auditors, the (current) market abuse regime and yet again short sellings. Some reforms are in a way self-evident and will probably be undertaken within this or next year. This is especially the case for a (further) reform of the regulation of auditors and for a reform of the regulation of the examination of financial reports. For both areas – usually stricter – concepts already exist and will this time have a better chance to be enacted. Therefore, Wirecard might turn to be a bad case that hopefully does not make bad law. However, there also are other aspects such as the relation of the market abuse regime and financial reporting that might require a deeper and longer analysis before concrete legislative measures can be put into place. The same applies for a further reform of the corporate governance of listed corporations, the regulation of short sellings and especially for the creation of a European framework for invalid (or false) financial reports. For these aspects Wirecard might constitute some kind of promoter for a further harmonization. This paper gives a short summary of the already publicly known facts of the Wirecard scandal, analyses how European Company and Financial Law was involved and identifies the challenges for a reform of European Company and Financial Law.