0:00 in june 2020 the german fintech company wirecard announced that €1,900,000,000 in cash had vanished from its balance sheet like the phantom profits from bernie madoff's fund this wasn't a case of money being lost or stolen the money it turned out had simply never existed this was wirecard a celebrated star of germany's tech scene a0:29 member of the prestigious dax index and its collapse was one of europe's largest modern accounting scandals the story doesn't begin with the collapse it begins with the warnings starting in 2015 the financial times published a series of investigations questioning wirecard's aggressive accounting and opaque operations in asia they found evidence of suspicious transactions they raised red flags and0:59 what did germany's financial regulator bayfin do they investigated the journalists they filed a criminal complaint against the reporters for market manipulation the watchdog meant to protect investors went after the people telling the truth that decision is the first piece of evidence here's who was running the company the public face was ceo marcus braun a polished executive who1:25 sold a vision of a digital payments revolution but the real engine of the fraud was allegedly his chief operating officer jan marcelik marcelik ran the company's business in asia a web of so called third party partners this is where the money trail goes cold wirecard claimed massive profits from these partners who supposedly processed payments on its behalf1:49 that €1,900,000,000 it was supposedly sitting in trustee accounts at two banks in the philippines it was the proof that the asian business was real for years wirecard's auditor ernst and young signed off on the books they took the company's word for it they accepted screenshots and what turned out to be forged documents as proof of the cash2:12 but the pressure from the financial times and skeptical investors eventually forced wirecard to commission a special audit from kpmg in april 2020 kpmg reported it could not verify the existence of the revenue from these third party partners the foundation cracked then two months later auditors were supposed to finally verify the cash but the banks they were directed2:38 to the banks in the philippines that supposedly held nearly €2,000,000,000 said they had no relationship with wirecard the confirmation letters were forgeries there2:52 was no money there were no accounts it was all a lie on 06/18/2020 refused to sign the audit wirecard was forced to admit the truth the aftermath was swift and brutal wirecard once valued at €24,000,000,000 filed for insolvency it was the first dax listed company ever to go under due to fraud ceo3:22 marcus braun resigned was arrested and now sits on trial in munich where he denies knowing anything3:31 january marselech the coo vanished he is now one of the world's most wanted fugitives the regulator baffin was gutted its president called the scandal a complete disaster before he was forced out and ernst and young the auditor they were banned from taking on new major clients in germany for two years a slap on the wrist for failing3:55 to spot a €2,000,000,000 hole in a balance sheet so what does it all add up to a story about a company that convinced the world it was the future of money when it couldn't even manage the oldest trick in the book lying about cash in an account the real story here isn't the complex fraud it's the simple4:17 failure of powerful people and institutions to do their jobs
