German prosecutors drop probe into FT over Wirecard

BERLIN (Reuters) – German prosecutors have dropped their investigation into journalists of the Financial Times in connection with its reporting on the corporate fraud at payments firm Wirecard that eventually led to its collapse.

The Munich public prosecutors office said it has discontinued the proceedings as it has not found enough evidence to support the case.

The prosecutors launched an investigation into a Financial Times journalist in February 2019, prompting the newspaper to reject any allegations against the newspaper or its journalists of market manipulation or unethical reporting.

The FT said in a statement carried in its story of the investigation being dropped: “We welcome this decision. The unfounded criminal complaint should never have been made by (regulator) BaFin and should have been dropped by Munich prosecutors far sooner. Our reporters acted courageously and responsibly in the public interest throughout.”

Wirecard had filed charges against the newspaper on suspicion of market manipulation, accusing them of cooperating with short sellers to help them to profit from share price falls after the reports on the company became public.

The prosecutors said on Thursday that the newspaper’s reporting had been fundamentally correct and they had not established direct contact with short sellers. They said the investigation would be continued against the short sellers.

Wirecard’s demise has embarrassed Germany’s government, which prides itself on a reputation for rectitude and reliability, amid criticism that authorities ignored red flags.

Finance Minister Olaf Scholz, responsible for the financial watchdog, told business newspaper Handelsblatt he was tightening rules on securities transactions for BaFin employees.

Handelsblatt said BaFin employees had increased their trading in Wirecard shares and share derivatives in the months before the firm’s collapse.

“Even the mere appearance of conflicts of interest must be avoided,” Scholz told Handelsblatt, referring to share trading.

“For this reason, the financial supervisory authority will issue additional regulations for employee transactions,” he added. “In the ministry, too, we will create stricter rules”.

On Tuesday, German lawmakers launched a parliamentary inquiry into Wirecard’s collapse in an effort to force the government to reveal more about a failure to avert the country’s biggest post-war corporate fraud.


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