Previous economic scandals have carried prison sentences of up to 25 years. However German body Kryptoszene.de says Wirecard’s management is particularly vulnerable to accusations of stock market manipulation, falsification of balance sheets and defrauding banks with respect to credit agreements.
Ex-Wirecard boss Markus Braun was released on Tuesday after posting a bail of €5m. Should allegations be substantiated, those involved could still face heavy fines and prison sentences, as a look at history shows. In 2005, Bernard Ebbers, former CEO of telephone company WorldCom, was sentenced to 25 years in prison for financial statement fraud. In the past, managers of Volkswagen and Deutsche Bank involved in scandals have also served multi-year prison sentences.
The Enron case in particular is frequently being compared to the case of Wirecard. The US group was forced to pay fines amounting to $7.1bn.
Jeffrey Skilling, former manager of the group, was sentenced to 24 years in prison for serious financial statement manipulation.
Meanwhile, payment service provider Wirecard is also facing a stream of lawsuits, with claims for damages currently amounting to 2 billion euros. This amount is many times higher than the previous reported annual profit of 347 million euros.
“As long as the actions of individuals have not been established beyond a doubt, the presumption of innocence should apply,” comments Kryptoscene analyst Raphael Lulay.
“However from a look at past economic scandals it is clear that those responsible are more than likely to face severe consequences. In comparison to US law, however, the legal situation in Germany allows for significantly lower penalties for white-collar crime – on the other side of the Atlantic, for example, a prison sentence of 150 years has already been imposed in connection with investment fraud”.