Sometimes events overtake you and you have to try to get on top of them. This is a bit of how I have felt about Wirecard AG. It began as an accounting fraud and developed into much, much more; literally unfolding every day. This past summer I got an email from Mikhail Reider-Gordon asking me if I wanted to do a podcast on Wirecard. Mikhail is the Managing Director of Institutional Ethics & Integrity at Affiliated Monitors, Inc. Mikhail’s areas of expertise include technology, privacy, cybersecurity, Intellectual Property (IP) and accountability in artificial intelligence (AI); the global anti-corruption and anti-money laundering (AML) regimes; media and entertainment; biotech and the life sciences; the public sector and international law. She is accustomed to working on extremely sensitive and high-profile matters, both nationally and internationally. Equally important, she has about the most insatiable curiosity I have ever seen.
Somewhere between five and ten minutes into this podcast it became clear to me that Wirecard was bigger than one podcast and Mikhail came loaded for bear. By the end of the podcast, I told her that I wanted to do a continuing series on Wirecard, for as long as the scandal lasted and she was up for doing it. This led to a ten-episode series which lasted up through the fall. During this time, I was looking at the numbers at the various podcast platforms I post including the FCPA Compliance Report, Megaphone, the Compliance Podcast Network, JDSupra, C-Suite Radio, iHeartRadio, Spotify, YouTube, GooglePlay, Stitcher, Amazon and (of course) iTunes.
The numbers were not simply outstanding but some of the best for any podcast series. They were some of the best numbers I have seen for any series. Since we were 10 podcasts in, we decided that this series warranted its own show so this week we rolled out the newest podcast offering on the Compliance Podcast Network, The Wirecard Saga. Each Wednesday at 3 PM CT, I will post the latest episode in the continuing Wirecard Sage.
All of the prior episodes are now collected in one place for your easy access and listening. They are:
- Episode 1 – Introduction. In this episode, we considered how long had Wirecard been under scrutiny and what was the role of Federal Financial Supervisory Authority (BaFin) in this disaster? We touched on what all this means for Germany Inc. and why didn’t the regulators step in? We look at Ernst & Young (EY) and speculated where are we headed in the Wirecard fraud?
- Episode 2 – Sort Sellers. In this episode, we consider the role of short sellers in the Wirecard imbroglio by looking at what short sellers are and their role in the market. Why are they so often attacked and how did they alert the public to the Wirecard fraud?
- Episode 3 – Germany Inc. In this episode, we take up the issue of what is Germany Inc.? Why is its brand so powerful? Where does Germany fit in the global economy? What are some other examples of German corporate fraud and where is all this corporate malfeasance coming from? What is the co-determination management structure and how does it play into all this? What has been the political fallout and the EU response?
- Episode 4 – Wirecard and Money-Laundering. In this episode, we take up the issue of money laundering in the Wirecard saga. How does money laundering work and how is it different from threat finance? Why 2006 was such an important year in AML? How did Wirecard make money through money laundering?
- Episode 5 – Fraud. In this episode, we take up the issue of fraud in the Wirecard saga. Was Wirecard even designed to make money or was it simply a Ponzi scheme? Why is Bank of Credit and Commerce International (BCCI) and not Enron Corporation Wirecard’s role model? How could BaFin employees oversee Wirecard while investing in it? (Ans: they couldn’t) What is Round-Tripping fraud and how did Wirecard master it?
- Episode 6 – End of Summer Wrap Up. In this issue we look at other issues relating to Wirecard that percolated over the summer, including: The political fallout in Germany and the impact on EU – rethinking Germany’s Frankfurt and Bonn for Financial Services Capitols post-Brexit? What and why is Deutsche Not Buying? Has the fullness of the scandal been revealed, or is more coming to light? What is, or what was, Project Panther? Enron had significant impact on the then Big-5; is Wirecard going to impact Big-4 in the same way?
- Episode 7 – Lies, Spies & Wirecard. In this episode, we explore lies, spies and Wirecard, including the following: What did BDO Unibank find in the Philippines? Why are the Wirecard Board of Directors afraid to meet in a conference room with windows? Why is there no interest in the bankruptcy remains of Wirecard and what did the initial Insolvency Report show? Was Wirecard ever designed to be profitable? And the continued adventures of Jan Marsalek.
- Episode 8 – Bring Lawyers Guns and Money. In this episode, we explore those other professional service providers who enabled Wirecard. We explore some of the following: Is EY at its Arthur Anderson moment? Who has potential lawsuits against EY? Is a Bundestag inquiry in the works? Will there be an EU-level inquiry into the German government response? Who were the Enablers? Why is now the time for lawyers to take a stand for the Rule of Law?
- Episode 9 – Running to Fraud with Hermes. In this episode, we explore the money laundering Wirecard engaged in via the project dubbed ‘Hermes’. Some of the topics explored include: What has the Wirecard scandal done to the German political scene? Is there any talk about BaFin reforms? How do Wirecard losses reach €20bn? What was the money laundering through Hermes?
- Episode 10 – On the Beach. In this episode, we explore shell companies. The topics we explore include: What is the Bundestag investigating, are they doing anything? Why were 250 Wirecard employees assigned to the money-laundering team? KPMG enters the story. Shell Companies, Shell Companies, Shell Companies. Why it might be time for a walk on the beach (and to read On The Beach).
On Wednesday, we premiered the first episode of our new series The Wirecard Saga, Episode 11 – The Duality Of It All and Binary Options. In this episode, we discuss how Wirecard used binary options to facilitate its massive fraud. We considered a wide variety of topics, including: The Brenner Base Tunnel (BBT) and the largest intelligence scandal for Austria since WWII. We ask was Jan Marsalek a BBT agent, asset or fellow traveler? What is the IMS Capital connection? A Russia/Turkey connection enter the saga. How BaFin’s right hand cannot find its left hand and why you should never, never buy a binary option in a dark alley.
Finally, for our biggest fan of the podcast, who asked if we were writing a book based upon our podcast series, the answer is a resounding yes.