Lawsuit against the Federal Republic of Germany for state liability - expert confirms investors' claims due to dysfunctional balance sheet control by DPR/BaFin

The Berlin attorneys Dr. Marc Liebscher (Dr. Späth & Partner Attorneys at Law) and Dr. Wolfgang Schirp (Schirp & Partner Attorneys at Law) have been commissioned by Wirecard investors to prepare the filing of class action lawsuits against the Federal Republic of Germany for state liability. The reason is the failure of the German regulatory authorities in the Wirecard AG case.

An expert opinion presented today by Prof. Dr. Moritz Renner (University of Mannheim) comes to the conclusion that investors in Wirecard AG have good prospects of filing claims for damages against the Federal Republic of Germany. This is because the Federal Republic of Germany, with the concrete design of the dual balance sheet control system by the Federal Financial Supervisory Authority (BaFin) and the German Financial Reporting Enforcement Panel (FREP), has violated its obligation to implement the European Transparency Directive in accordance with its stipulations in Article 24. This result is supported by a peer review report of the European Securities and Markets Authority (ESMA), the EU's supervisory authority for the securities markets, also published today. ESMA has identified numerous deficiencies at FREP and BaFin, including significant deficiencies in the effectiveness of the supervisory system for financial reporting.

Attorney Dr. Marc Liebscher emphasizes: "ESMA's deficiency report supports our approach to sue the Federal Republic of Germany. This is because the ESMA has determined that, with regard to the respective roles of BaFin and FREP in indications of fraud in accounting, BaFin and FREP are not coordinated. The ESMA stated that BaFin was not in a position to thoroughly assess the FREP's examinations of Wirecard, which would have enabled BaFin to decide whether it should take over the examinations from the FREP. In addition, ESMA even disclosed cases of lack of coordination and inefficiency in the exchange of information between the relevant teams of BaFin".

Attorney Dr. Wolfgang Schirp sees the design of the balance sheet control in Germany as an incorrect implementation of the EU Transparency Directive. Attorney Dr. Schirp: "The Directive requires in Art. 24 that a functioning balance sheet control system must be established in the Federal Republic of Germany. This requirement of the directive follows from the idea of individual protection: the directive aims to protect investors. With the dysfunctional implementation of the Directive, the Federal Republic has violated its obligations. This is also confirmed by the Renner report. But then the Federal Republic of Germany must compensate the Wirecard investors: After all, if the FREP/BaFin had been able to correctly examine the false balance sheets of Wirecard AG, they would have been able to recognize that they were false and would have initiated supervisory measures. The failure to implement the requirements of the Transparency Directive is therefore causal for the damage suffered by the WIrecard investors. According to the established case law of the European Court of Justice, recourse to general life experience is sufficient as proof of causality. This approach to state liability under European law, which was emphasized in the Renner report, simplifies legal actions by investors enormously."

Damaged Wirecard investors can register without obligation and free of charge by sending an e-mail to wirecard@schirp.com and receive further information.

For further information are available:

Dr. Wolfgang Schirp, Schirp & Partner Rechtsanwälte mbB, Leipziger Platz 9, D-10117 Berlin, Tel. 0049-30-326170 und 0049-179-5320213, Mail: schirp@schirp.com, URL: www.schirp.com

Dr. Marc Liebscher, LL.M. (Washington, D.C.), Dr. Späth & Partner Rechtsanwälte mbB, Kurfürstendamm 102, D-10711 Berlin, Tel. 0049-30-326170 und 0049-176-93150194, Mail: liebscher@dr-spaeth.com; URL: www.ey-klage.de