Tremors before ‘The Big One’: ESG alt data firm details “breadcrumb trail” that warned investors of Wirecard downfall

Crystal Ball

ESG data warned investors of the “tremors” building up at German e-payments firm Wirecard that led to its eventual blow-up, says alt data firm Truvalue Labs in its latest report on the firm.

Wirecard was declared insolvent last week, owing its creditors USD4 billion after fraudulent activity left a USD2.1 billion hole in the firm’s accounts.

Its auditor, EY, says there are “clear indications that this was an elaborate and sophisticated fraud, involving multiple parties around the world in different institutions, with a deliberate aim of deception”.

Allegations of fraud have dogged the firm for years, since the Financial Times first started reporting suspicions in 2015. 

Truvalue Labs says that it first flagged the problems to its clients back in November 2018, when a class action lawsuit was filed laying out a case of prolonged bad behaviour and apparent forgery by Wirecard employees. Over the next two years, a “steady diet of negative news about the company” drove Truvalue to rate Wirecard far below its industry peers. 

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