Wirecard what happens when ‘those that are meant to check compliance don’t’
The Wirecard fraud highlights what happens when regulators and auditors fail to act properly and underlines the importance of encouraging and protecting whistleblowers, said the reporter who exposed the firm.
Speaking at Compliance Week’s Europe conference in London, Dan McCrum, an investigative journalist with the Financial Times, said one of the principal reasons why Wirecard’s fraud went undetected for so long was because no one sought to challenge such a “successful” company, even when its accounts and business model didn’t make sense.
“Wirecard was very profitable and was growing quickly. It was a ‘sexy’ company that looked as if it was going to be the next big thing in a sector that generated excitement,” McCrum said. “It became obvious that investors, regulators, and auditors didn’t ask too many questions because it was the kind of company they all wanted to attract, despite repeated warnings over several years it was impossible to tell how the company actually made its money.”