Wirecard scandal: EY faces tough regulatory penalties and business in Germany becomes more difficult

Lawyers for the aggrieved investors call for vigorous action by the judiciary

The state auditor regulator is threatening EY and several employees with draconian penalties. (The "Handelsblatt" first reported on this). In addition to fines, which the company could certainly absorb, the threat is a ban on accepting certain audit engagements. Such a ban on competition would be the much more unpleasant sanction for EY. 
The consequences of the Wirecard scandal are also beginning to show in the market. It is true that EY still holds eight audit mandates for DAX companies. But: when it comes to new DAX mandates, EY has now been out of the race since 2020. Overall, the revenue of EY's German audit business slightly declined last year.

The ongoing sanctions and market developments coincide with restructuring efforts at EY. A separation of the audit and advisory businesses is being prepared under the name "Project Everest", followed by an IPO of the advisory business. All these developments are worrying lawyers who represent injured Wirecard investors and are demanding compensation from EY. 

Dr. Wolfgang Schirp, Berlin, whose firm represents the largest number of lawsuits already pending against EY, said: "Time is an important factor in the proceedings against EY. We have filed lawsuits against EY since 2020 and have pushed all proceedings full steam ahead. The evidence is good, and all conditions are in place to enforce claims for damages for the plaintiffs. Nevertheless, no judgments have been issued in favor of the plaintiffs to date. Our German and international clients are very concerned that the proceedings are dragging on for so long. The capital investor model proceedings now underway must not be the cause of further delays that give EY the opportunity to shift economic substance. Otherwise, the aggrieved parties would end up being left without rights. It would be very damaging for all plaintiffs and also for Germany's international reputation if, after the failure of supervision in the run-up to the Wirecard scandal, the follow-up by the civil judiciary were to fail as well. All the players involved must do their best to ensure that this does not happen. Germany's reputation and the reputation of the judiciary are at stake."      

For further information, please contact: Dr. Wolfgang Schirp, Schirp & Partner Rechtanwälte mbB, Leipziger Platz 9, D - 10117 Berlin, Tel. 0049-30-3276170, mail: , URL