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HomeInternationalEY Faces Hefty 1.5 Billion Euro Lawsuit for Wirecard Audit Failures

EY Faces Hefty 1.5 Billion Euro Lawsuit for Wirecard Audit Failures

EY, the global accountancy firm, finds itself embroiled in yet another legal battle over its auditing practices, this time facing a whopping 1.5 billion euro ($1.66 billion) lawsuit linked to the collapse of Wirecard in 2020. The lawsuit, initiated by Wirecard’s insolvency manager Michael Jaffe, was filed in a Stuttgart court, adding to the mounting legal challenges EY is confronting in the wake of the scandal.

This new claim comes hot on the heels of another investor lawsuit lodged last week, demanding over 700 million euros in damages. In both cases, EY, which has chosen not to comment on these developments, is being held accountable for its auditing role in the events leading up to Wirecard’s dramatic implosion.

Wirecard’s fall from grace was not only a significant blow to its creditors, who were left grappling with nearly $4 billion in debts but also sent shockwaves through Germany’s business landscape. The payment company’s insolvency in June 2020 revealed a staggering 1.9 billion euro discrepancy in its accounts, which EY attributed to an intricate global fraud scheme. This revelation has since cast a shadow over Germany’s political and regulatory sectors, prompting intense scrutiny over their delayed response to the long-standing allegations against Wirecard.

Shareholders, represented by lawyer Klaus Nieding in the recent lawsuit, argue that EY’s failure to detect the missing 1.9 billion euros was a glaring oversight. Nieding pointed out that another auditor swiftly uncovered the missing funds, suggesting that EY could have easily identified the discrepancy.

As these legal battles unfold, EY continues to face criticism for its auditing practices, particularly in the Wirecard case. The Stuttgart lawsuit, first reported by Handelsblatt, underscores the growing financial and reputational risks for EY as it navigates through the aftermath of one of Germany’s most significant corporate scandals.