The FT's Dan McCrum Did Not Call The Germans Jackbooted Thugs

That was the title of a March 2019 post that began:

Yet, the reaction of the company (Wirecard) and the regulators (Germany's BaFin) was almost as if he had.
The summary of events:...

And ended:

Free Dan McCrum
But first, who is Dan McCrum?

Sometimes there's a man... I won't say a hero, 'cause, what's a hero? But sometimes, there's a man.
And I'm talkin' about the Dude here. Sometimes, there's a man, well, he's the man for his time and place. He fits right in there.

Sometimes there's a man, sometimes, there's a man. Well, I lost my train of thought here.
But... aw, hell. I've done introduced it enough.

Where to begin?
Fagin, I mean Paul Murphy drops by Markets Live?

Cinema fans will recognize the Coen Brothers The Big Lebowski, to whom we gave heartfelt apologies for the blatant rip-off.

That 2019 story was updated in June 2020 as Wirecard Flashback: "Dan McCrum Did Not Call The Germans Jackbooted Thugs" Some of the additions:

March 2020
Dan's Back: "The case for massive corona-stimulus"
Achtung!
Mr. McCrum was Editor of FT Alphaville while Ms. Kaminska was away.
Then he fell under the dark spell of an investigative Svengali and got sued by WireCard.
He will prevail in the lawsuit.
Now he's back at FTAV.
How's that for a mini-bio?

And:

     Dear Paul Murphy: All is Forgiven, Please Tell The Toronto Sex Trafficking, Hookers and Wirecard Story

And the latest, From Britain's Press Gazette, September 2:   

Wirecard: How the FT proved the pen is mightier than a €24bn criminal gang

The FT Wirecard investigation began with a tip from a hedge fund manager to Dan McCrum, a reporter on the title’s Alphaville markets blog.

“Would you be interested in some German gangsters?”

This lead prompted a six-year investigation that culminated in the exposure of the world’s biggest financial fraud since Enron, the collapse of Germany’s €24bn fintech powerhouse Wirecard, the arrest of its chief executive, and the flight of COO Jan Marsalek (who remains at large).

Along the way McCrum was threatened with jail by the German state, subject to hacking and physical surveillance (along with FT colleagues) and smeared as a crooked journalist.

All in all, Wirecard has been a hell of a story and one that is soon to be retold in a documentary film and McCrum-authored book.

The story was named investigation of the year at last year’s British Journalism Awards and led to McCrum being named journalist of the year and the FT picking up news provider of the year for a record third consecutive time.

Rolling the clock back to that first Wirecard tip in 2014, McCrum says: “Back then it was this little-known German company worth four or five billion euros who pretty much no one had heard of. The first question was what is Wirecard? And its numbers didn’t add up.”

Based in a Munich suburb, Wirecard processed tens of billions of euros in credit and debit transactions each year as a member of the Visa and Mastercard networks.

McCrum’s first Alphaville post, in April 2015, headlined The House of Wirecard – ran a slide rule over the numbers and questioned its sky-high valuation....

....MUCH MORE

HT: FT Alphaville's Further Reading post.

And another recommendation from the 'Ville, this one dated July 2, 2020:

Elsewhere on Friday:
– Our very own Dan McCrum speaks to the German media. 

Finally, I realize what McCrum, Murphy and the FT did appears to negate Mr. Mir's thinking on breaking news but the Wirecard story is actually the exception that proves the rule.

And besides, the FT is not "mass media" in the sense the WaPo or the NYT are. 

Not. At. All.

After Reading The FT's Latest On Wirecard, I'd Say We Should Put Up A Statue Honouring Dan McCrum....

....but, well, you know.

Here is Mr. McCrum's Twitter timeline with some links and tidbits.

A good morning to all the whistleblowers, and a very big thank you.

— Dan McCrum (@FD) June 22, 2020

The head of Germany's financial watchdog Bafin says the Wirecard situations is "a disaster" and "a shame". He accepts there have been failings at his own institution. "I salute" those journalists and short-sellers who were digging out inconsistencies on Wirecard, he says.

— Martin Arnold (@MAmdorsky) June 22, 2020

Comments are open on the story, btw

— Dan McCrum (@FD) June 22, 2020

....MUCH MORE  

Speaking of statues, I was going to post something on the unboxing of the Churchill statue last week:

Britain removes protection from Churchill statue for Macron visit

using as a headline the message the Admiralty supposedly sent out to the fleet when Churchill was appointed to his second go-round as First Lord of the Admiralty by Neville Chamberlain in September 1939:

"Winston is Back!"

Which of course led to a remembrance of a bit of dialogue recounted by Manchester in The Last Lion between Churchill and his "man," David Inches:

Winston Churchill:

You're very rude to me, Inches.

David Inches:

*You're* very rude to *me*, sir.

Winston Churchill:

Yes, but I am a great man.

It doesn't sound like Dan McCrum but who knows, resounding success can change people.

Previously:

Free Dan McCrum
But first, who is Dan McCrum?

Sometimes there's a man... I won't say a hero, 'cause, what's a hero? But sometimes, there's a man.
And I'm talkin' about the Dude here. Sometimes, there's a man, well, he's the man for his time and place. He fits right in there.

Sometimes there's a man, sometimes, there's a man. Well, I lost my train of thought here.
But... aw, hell. I've done introduced it enough.

Where to begin?.....

Last seen in Wirecard Flashback: "Dan McCrum Did Not Call The Germans Jackbooted Thugs".

It Looks Like The FT's Dan "Wrecking Ball" McCrum Is About To Topple Another Government

Mr. McCrum, along with Paul Murphy and others bulldogged the Wirecard story so long and so hard that finally the German authorities, most especially BaFin, but also up into the highest ranks of the Government, had to take note of, and act on, the disclosures.

The effects are still being felt. Here's Bild, January 2, (machine translation, sorry, not feeling up to doing it myself):

Pistorius instead of Scholz?

Wild rumor about a chancellor swap

The SPD is in a hangover mood when looking at the polls at the end of the year.

Approval fell from 20 to 15 percent over the course of 2023 (INSA survey for BILD from December 31st). Even worse: the gap to the Union (32 percent) has almost tripled from 6 to 17 percentage points. A key factor in the SPD debacle: Only one in five Germans recently rated Olaf Scholz's work as chancellor positively.

▶︎ Close your eyes and get through? There are apparently doubts about this SPD strategy, as the major Italian newspaper “La Repubblica” reports. She writes about “bad rumors” that were making the rounds in the Bundestag – without naming the rumor spreaders.

Accordingly, the Chancellor could be forced to resign in 2024. There are already whispers about a possible successor “in one wing of the Social Democrats”: Boris Pistorius (63), the Federal Defense Minister who is more popular with the people.

What did Scholz have to do with Marsalek as finance minister?

The reason for the change in the Chancellery, according to two anonymous sources cited by the newspaper's Berlin correspondent: the scandal surrounding the fraud company Wirecard and its boss Jan Marsalek (43), who went into hiding. He is believed to be in Moscow and, according to new British and US findings, has long been playing a role in Putin's secret service, the FSB.

Scholz was Finance Minister under Merkel when the biggest scandal in German economic history since the Second World War was exposed in 2020. As minister, Scholz was responsible for the financial regulator BaFin, which did not notice the billion-dollar fraud involving air bookings. And this despite the fact that the financial service provider Wirecard was also a partner of the federal government and even processed sensitive payments for the Federal Intelligence Service.

 When that came out, the Greens, in their opposition role at the time, went to the barricades: “The information confirms the long-suspected connection between the BND and Wirecard,” raged Lisa Paus (55), today’s family minister at Scholz’s cabinet table. And: “The federal government is stonewalling when it comes to clarification. The investigative committee must finally shed light on the matter.”

Olaf Scholz has always denied shared responsibility for the scandal. But critics accused BaFin and thus also the Ministry of Finance of failing from the start. And to date, the Italian newspaper criticizes, the Finance Ministry has rejected every request to make the meetings between Wirecard boss, Scholz and his men public. Because there were previously unknown agreements between the government and the alleged Putin spy?....

....MUCH MORE      

And if, you prefer the original: https://www.bild.de/politik/inland/politik-inland/pistorius-statt-scholz-wildes-geruecht-um-kanzler-tausch-86602778.bild.html

Some (there are many) of our post and links:     

After Reading The FT's Latest On Wirecard, I'd Say We Should Put Up A Statue Honouring Dan McCrum....

Free Dan McCrum
But first, who is Dan McCrum?

Sometimes there's a man... I won't say a hero, 'cause, what's a hero? But sometimes, there's a man.
And I'm talkin' about the Dude here. Sometimes, there's a man, well, he's the man for his time and place. He fits right in there.

Sometimes there's a man, sometimes, there's a man. Well, I lost my train of thought here.
But... aw, hell. I've done introduced it enough.

Where to begin?.....

Last seen in Wirecard Flashback: "Dan McCrum Did Not Call The Germans Jackbooted Thugs", which also included our attempt to chronicle Mr. McCrum's early reportage with links to the FT articles and well, the not so glorious responses of the Germans including:

....Wirecard Statement 29 March 2019

Today’s FT reporting is part of a larger package of incorrect and misleading information which has been published by the FT since January 2019. We have already commenced legal proceedings against Dan McCrum and the Financial Times in the Munich Court in relation to the repeated and continuing disclosure and false representation of confidential information and/or company secrets as well as misquoting of documents.

The inaccurate information published today has been deliberately misquoted by the FT to further distort fact and fiction....

Distorting fiction?

Among other posts, this one stood out:

April 2019
Dear Paul Murphy: All is Forgiven, Please Tell The Toronto Sex Trafficking, Hookers and Wirecard Story

Wirecard Flashback: "Dan McCrum Did Not Call The Germans Jackbooted Thugs"

Don't mention the war.
Originally posted March 28, 2019:

Yet, the reaction of the company (Wirecard) and the regulators (Germany's BaFin) was almost as if he had.
The summary of events:

On January 30 the Financial Times published a story headlined "Executive at payments giant suspected of using forged contracts" by Dan McCrum in London and Stefania Palma in Singapore.

Wirecard issued a statement calling the reporting  “false, inaccurate, misleading and defamatory” which is a bit of a word salad.
Also: “This article lacks any substance and is completely meaningless” 

On January 31 Reuters reported:

A Financial Times report on alleged wrongdoings at German payments company Wirecard gave no reason to launch a criminal probe, German prosecutors said on Thursday, adding they had launched preliminary investigations over potential market manipulation.
The prosecutor’s office in Munich said that Wirecard had contacted the authorities after the FT report, which caused the company’s share price to drop by up to 25 percent on Wednesday...

Damn, that's moving pretty fast for prosecutors.

On February 1 the Financial Times published "Wirecard’s law firm found evidence of forgery and false accounts" by the same two reporters.

Wirecard that same day responded with “inaccurate, misleading and defamatory”, leaving out the "falsch" from the January statement.

On February 7 the FT publish "Wirecard: inside an accounting scandal"

On February 8 Wirecard issued a statement that ended with:

We will use all available legal means to protect the company and in particular our employees and their personal rights. Wirecard is taking legal actions against FT and its unethical reporting. 

On February 18 Germany's Federal Financial Supervisory Authority (BaFin) issued:

General Administrative Act of the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) on the prohibition on establishing and increasing net short positions in shares of Wirecard AG

Which put us firmly into "what the hell is going on" territory.
Although it's probably not unprecedented, I can't recall any regulator banning shorts on an individual issue. Such a move is in itself a market manipulation akin to the commodities exchanges going "liquidation only" to break the Hunt brothers in their silver adventure.

Also on February 18 the Financial Times published "FT statement on Wirecard reporting"

On March 28 Reuters reported:

German payments company Wirecard said on Thursday it was suing the Financial Times over a series of investigative reports that it said made use of, and misrepresented, business secrets.
Wirecard has filed a suit at the Munich regional court against both the FT and its reporter, Dan McCrum, seeking a ruling on the merits of its case. If successful, the company would then press for monetary redress.

“Our objective is to seek a halt to the incorrect use of business secrets for the purposes of reporting, as well as damages,” Wirecard said in a statement. No comment was immediately available from the FT.....

....Wirecard said on Monday that the final results of a probe by outside law firm Rajah & Tann had found that local staff in Singapore may have committed financial crimes, but that these were not material and there was no evidence that its German head office was complicit.

Beg pardon? "May have committed financial crimes"?

And now we are in Cloud Cuckoo Land.
The first red flag is when management start targeting short-sellers.
The second red flag is when you start seeing nonsense in the corporate communications,
As an example, if the reader will indulge me in a short detour. From a 2010 post:

My Favorite Stock Scam Blowhards

After doing this a while you don't even need to call in the forensic accountants to spot the weird ones. A bit of background, Equisure Inc. was purportedly a reinsurer based in Belgium that had, in a remarkably short period of time gone from the NASDAQ bulletin board to the American Stock Exchange by way of a reverse merger with a dormant shell company.

The heart of the scam was to hype the stock by way of news releases to a) gun the stock for the early buyers and b) get the stock on the Federal Reserve Board's list of marginable securities.
That step is a bit more sophisticated than your run-of-the-mill pump and dump because it allows the crooks to borrow against the shares rather than having to sell them. The lack of selling pressure makes it easier to maintain the run-up until the plug is pulled.

Of course the scammers also took whatever petty cash was in the company's coffers.
I never saw a complete accounting but a fair estimate of the EQE take was $100 Mil.

....But first, one of my favorite examples of a stock scam (I told you, I have a morbid fascination with the underbelly of the markets, it's like watching the lions approach the wildebeest at the watering hole, you don't want to see it but you can't look away)

..Peter Uttley, Equisure's chairman and a former Lloyds of London executive, took control of the company this week, assuming the chief executive post....

...Uttley said in the press release that his chairman role had been a "passive" one, but he now plans an active reorganization of the company, whose reputation has been stained by allegations that it is a scam insurance operation....

...In an unusually emotional statement to the press, sent from an Equisure board meeting Friday in London, Uttley told his version of events over the summer, which eventually led to the delisting of Equisure shares on the American Stock Exchange.

"The simple truth was consumed in the belly of deception, but now has been vomited for the world to see," Uttley began.

He then proceeded to tell a story of three men, whom he described as "liars," "cheats," and "scallywags," who worked with law enforcement officials and the press to spread false rumors about the company with the intent of buying Equisure out at 50 cents a share, a tiny fraction of the stock's trading price of $15, before AMEX suspended trading Aug. 1.

Roger that, consumed in the belly of deception, vomited for the world to see, over.
Watch for beaucoup bloviating.

Anyhoo here's the editor of the Financial Times with the latest:

Second chapter in our investigation into Wirecard, Germany’s one-time fin-tech darling. We are making it free to read as a matter of public interest https://t.co/gQzlBFSobj via @financialtimes

— Lionel Barber (@lionelbarber) March 29, 2019 

Wirecard responded with:
Wirecard Statement 29 March 2019

Today’s FT reporting is part of a larger package of incorrect and misleading information which has been published by the FT since January 2019. We have already commenced legal proceedings against Dan McCrum and the Financial Times in the Munich Court in relation to the repeated and continuing disclosure and false representation of confidential information and/or company secrets as well as misquoting of documents.

The inaccurate information published today has been deliberately misquoted by the FT to further distort fact and fiction....

Distorting fiction?

And a little pre-earnings hype from the CEO:

There is no doubt in the effectiveness of our operations and we are very much looking forward to share the great results at the end of April. #TechFuture

— Markus Braun (@_MarkusBraun) March 29, 2019

Oddly enough, after the close of the U.S. markets today I found myself reading about the securities fraud case that opened the floodgates for actions against the professionals usually found in proximity to the fraud; underwriters, lenders, lawyers, auditors...
Especially auditors.
That's a story for another day.

If interested see also:
Duuude, This Paul Murphy Fellow Is Taking No Prisoners

Free Dan McCrum
But first, who is Dan McCrum?

Sometimes there's a man... I won't say a hero, 'cause, what's a hero? But sometimes, there's a man.
And I'm talkin' about the Dude here. Sometimes, there's a man, well, he's the man for his time and place. He fits right in there.

Sometimes there's a man, sometimes, there's a man. Well, I lost my train of thought here.
But... aw, hell. I've done introduced it enough.

Where to begin? 

Which was followed by:
April 2019 
The Internet Has Blown the Lid Off This Dan McCrum Guy
June 2020
"Wirecard offices searched as prosecutors probe management board"
March 2020
Dan's Back: "The case for massive corona-stimulus"
Achtung!
Mr. McCrum was Editor of FT Alphaville while Ms. Kaminska was away.
Then he fell under the dark spell of an investigative Svengali and got sued by WireCard.
He will prevail in the lawsuit.
Now he's back at FTAV.
How's that for a mini-bio?

Two can play the concise summary game Mr. McCrum.
Plus, I get to post stories like:
April 2019

Dear Paul Murphy: All is Forgiven, Please Tell The Toronto Sex Trafficking, Hookers and Wirecard Story
I was righteously discomfited* when the Financial Times' Paul Murphy frontran our plans to revisit the BBC's look at the Ticino spaghetti harvest, fearing that everyone who reads both FT Alphaville and Climateer Investing would assume, because he hit publish first, that we were uncreatively ripping-off ideas, unattributed.

However, recent life events (this morning's Markets Live) have convinced me to reconsider that position. In today's installment, Mr. Murphy retakes his perch at ML.

From FT Alphaville's Markets Live (sans the comments of the rabble, you can check them out by following the link):

BE Morgen.

[voiceover: why is Bryce speaking German?]  

BE So .... there are many things we can talk about today, and some we can't talk about.

[vo: well that's cryptic]

BE Or I can't, at least. 

PM Scratch that Bryce!

[vo: oh look, it's Alphaville's founder and first editor]

PM I couldn't stay away

PM SoftintheheadBank have just bet close to a billion dollars against my good colleague and friend Dan McCrum

BE Aha ........... It's Paul Investigations Editor Murphy.

BE Yes, I figured that might be the reason you're here.

PM We can't and won't be silenced by money

BE Wirecard up 6% or so on the news.

PM A billion dollar bet against Dan

BE Sort of.....

*****

...PM I should mention quickly that the lawyer, Nigel, has banned me from doing AV posts on Wirecrd...

*****

PM Alexis, an escort in Toronto, decided that a certain classified site was a scam

PM And she heard on the radio that it was maybe encouraging human trafficking

PM So she found that Wirecard were handling the payments...

[vo: wha?]

...MORE, so much more

And many more, but go to the FT for the rest of the story.

Free Dan McCrum

But first, who is Dan McCrum?

Sometimes there's a man... I won't say a hero, 'cause, what's a hero? But sometimes, there's a man.
And I'm talkin' about the Dude here. Sometimes, there's a man, well, he's the man for his time and place. He fits right in there.

Sometimes there's a man, sometimes, there's a man. Well, I lost my train of thought here.
But... aw, hell. I've done introduced it enough.

Where to begin?
Fagin, I mean Paul Murphy drops by Markets Live?

Wednesday, 20th February 2019

BE Okay, so what's happening?

BE (Welcome to Markets Live, FT Alpsrbgijjadgldafb)

BE Since we've last been on air, Elon Musk's taken to trolling us....

BE Go here if you don't get the reference: https://ftalphavil...he-number-500-000/

PM Penned by the Market Manipulator himself (Dan)

11:06 am

PM Hi btw

PM Just thought I'd pop in

Excel Developer @BE : 

Is that Dan McCrum again, do journalists have the equivalent of a cat's nine lives?

BE New phone who dis?

BE Oh, Paul. Hello. What's on your mind?

BE Let me guess .....

You'll note that with his very first words, Fagin, I mean Murphy throws young Oliver, I mean Dan under the bus.
Perhaps realizing how "Penned by the ..." would play out in the court of public opinion Mr. Murphy came back to FT Alpsrbgijjadgldafb with a piece entitled "Mensch! Dan McCrum is innocent, ok?"

And the Free Dan McCrum headline?
From the above linked "Mensch...":

...And if you haven't yet read Dan and Stefania's detailed account of what looks to have been going on at Wirecard, do so now. It's free to read here....

Apologies to The Big Lebowski for the use of the introduction.

"FT reporters who broke Wirecard story sign with agency"

I smell Oscar!

From Deadline:
WME Signs Wirecard Investigative Journalists Dan McCrum And Paul Murphy

Dan McCrum and Paul Murphy, the Financial Times journalists who investigated and revealed the explosive Wirecard scandal, have signed with WME in all areas. The agency will represent them across film, television, books and podcasts.

Murphy oversaw the five-year investigation into the German fintech company, with McCrum serving as the lead reporter. Through their findings, McCrum and Murphy exposed the biggest accounting fraud case since Enron.

At one time valued at $25B, the German company became a darling of the financial world through its claim that it would end the use of cash through digitizing payments. McCrum and Murphy revealed a very different business, built upon a network of fraudulent activity, including inflating sales, deals with money launderers, and misleading its auditor about 1.9B Euros that went “missing,” according to the company....

....MORE

Headline from and HT to: Talking Biz News

See also June 27's:

Wirecard, The Movie: The FT's Dan McCrum Potrays A Man Pushed To The Brink By Teutonic Treachery
From the Financial Times:

I mean to begin with it was hard to believe. You have a sense of the Financial Times as a reputed organisation. And you're very publicly being called a criminal. I was sort of used to it when the company had done it, because the company had done it for years.

But when you suddenly find yourself facing an actual criminal investigation in Germany, with regulators where the company which you're writing about seems to have certainly the ear of these people, that was - there were some moments where it was quite stressful. You do at times start to think that you're going a little bit mad.

Because obviously you become paranoid. If you constantly think your emails are going to be hacked, or if you think people are following you. There was a period where I started to double back when I was going to meet people, or you would get on a Tube carriage, and jump off again, which seems ridiculous.

And it seemed ridiculous at the time. We were very conscious that there was active surveillance going on. So you start to doubt yourself. And when you try and explain this to anyone as well, like yes, I'm trying to report on the company. And all this crazy stuff is happening.

Even now I think about it, it sounds ridiculous. Like, some sort of film. My name is Dan McCrum. I'm a member of the investigations team at the Financial Times. Wirecard was pretty much a little known technology company. Barely anyone had heard of it, and even fewer people really understood what it did....

....MUCH MORE

Click through for the video and the rest of the transcript.

"Taut, Gripping"

—Investigations Illustrated
.

"Makes Hitchcock look like a community college project"

—Madness Monthly
.

"His Most Challenging Role Yet,

In comparison Lear and Hamlet were the picture of mental health"

—Phantasmagoria

Dan McCrum Did Not Call The Germans Jackbooted Thugs

Yet, the reaction of the company (Wirecard) and the regulators (Germany's BaFin) was almost as if he had.
The summary of events:

On January 30 the Financial Times published a story headlined "Executive at payments giant suspected of using forged contracts" by Dan McCrum in London and Stefania Palma in Singapore.

Wirecard issued a statement calling the reporting  “false, inaccurate, misleading and defamatory” which is a bit of a word salad.
Also: “This article lacks any substance and is completely meaningless” 

On January 31 Reuters reported:

A Financial Times report on alleged wrongdoings at German payments company Wirecard gave no reason to launch a criminal probe, German prosecutors said on Thursday, adding they had launched preliminary investigations over potential market manipulation.
The prosecutor’s office in Munich said that Wirecard had contacted the authorities after the FT report, which caused the company’s share price to drop by up to 25 percent on Wednesday...

Damn, that's moving pretty fast for prosecutors.

On February 1 the Financial Times published "Wirecard’s law firm found evidence of forgery and false accounts" by the same two reporters.

Wirecard that same day responded with “inaccurate, misleading and defamatory”, leaving out the "falsch" from the January statement.

On February 7 the FT publish "Wirecard: inside an accounting scandal"

On February 8 Wirecard issued a statement that ended with:

We will use all available legal means to protect the company and in particular our employees and their personal rights. Wirecard is taking legal actions against FT and its unethical reporting. 

On February 18 Germany's Federal Financial Supervisory Authority (BaFin) issued:

General Administrative Act of the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) on the prohibition on establishing and increasing net short positions in shares of Wirecard AG

Which put us firmly into "what the hell is going on" territory.
Although it's probably not unprecedented, I can't recall any regulator banning shorts on an individual issue. Such a move is in itself a market manipulation akin to the commodities exchanges going "liquidation only" to break the Hunt brothers in their silver adventure.

Also on February 18 the Financial Times published "FT statement on Wirecard reporting"

On March 28 Reuters reported:

German payments company Wirecard said on Thursday it was suing the Financial Times over a series of investigative reports that it said made use of, and misrepresented, business secrets.
Wirecard has filed a suit at the Munich regional court against both the FT and its reporter, Dan McCrum, seeking a ruling on the merits of its case. If successful, the company would then press for monetary redress.

“Our objective is to seek a halt to the incorrect use of business secrets for the purposes of reporting, as well as damages,” Wirecard said in a statement. No comment was immediately available from the FT.....

....Wirecard said on Monday that the final results of a probe by outside law firm Rajah & Tann had found that local staff in Singapore may have committed financial crimes, but that these were not material and there was no evidence that its German head office was complicit.

Beg pardon? "May have committed financial crimes"?

And now we are in Cloud Cuckoo Land.
The first red flag is when management start targeting short-sellers.
The second red flag is when you start seeing nonsense in the corporate communications,
As an example, if the reader will indulge me in a short detour. From a 2010 post:

My Favorite Stock Scam Blowhards

After doing this a while you don't even need to call in the forensic accountants to spot the weird ones. A bit of background, Equisure Inc. was purportedly a reinsurer based in Belgium that had, in a remarkably short period of time gone from the NASDAQ bulletin board to the American Stock Exchange by way of a reverse merger with a dormant shell company.

The heart of the scam was to hype the stock by way of news releases to a) gun the stock for the early buyers and b) get the stock on the Federal Reserve Board's list of marginable securities.
That step is a bit more sophisticated than your run-of-the-mill pump and dump because it allows the crooks to borrow against the shares rather than having to sell them. The lack of selling pressure makes it easier to maintain the run-up until the plug is pulled.

Of course the scammers also took whatever petty cash was in the company's coffers.
I never saw a complete accounting but a fair estimate of the EQE take was $100 Mil.

....But first, one of my favorite examples of a stock scam (I told you, I have a morbid fascination with the underbelly of the markets, it's like watching the lions approach the wildebeest at the watering hole, you don't want to see it but you can't look away)

..Peter Uttley, Equisure's chairman and a former Lloyds of London executive, took control of the company this week, assuming the chief executive post....

...Uttley said in the press release that his chairman role had been a "passive" one, but he now plans an active reorganization of the company, whose reputation has been stained by allegations that it is a scam insurance operation....

...In an unusually emotional statement to the press, sent from an Equisure board meeting Friday in London, Uttley told his version of events over the summer, which eventually led to the delisting of Equisure shares on the American Stock Exchange.

"The simple truth was consumed in the belly of deception, but now has been vomited for the world to see," Uttley began.

He then proceeded to tell a story of three men, whom he described as "liars," "cheats," and "scallywags," who worked with law enforcement officials and the press to spread false rumors about the company with the intent of buying Equisure out at 50 cents a share, a tiny fraction of the stock's trading price of $15, before AMEX suspended trading Aug. 1.

Roger that, consumed in the belly of deception, vomited for the world to see, over.
Watch for beaucoup bloviating.

Anyhoo here's the editor of the Financial Times with the latest:

Second chapter in our investigation into Wirecard, Germany’s one-time fin-tech darling.  We are making it free to read as a matter of public interest  https://t.co/gQzlBFSobj via @financialtimes

— Lionel Barber (@lionelbarber) March 29, 2019

Wirecard responded with:
Wirecard Statement 29 March 2019

Today’s FT reporting is part of a larger package of incorrect and misleading information which has been published by the FT since January 2019. We have already commenced legal proceedings against Dan McCrum and the Financial Times in the Munich Court in relation to the repeated and continuing disclosure and false representation of confidential information and/or company secrets as well as misquoting of documents.

The inaccurate information published today has been deliberately misquoted by the FT to further distort fact and fiction....

Distorting fiction?

And a little pre-earnings hype from the CEO:

There is no doubt in the effectiveness of our operations and we are very much looking forward to share the great results at the end of April. #TechFuture

— Markus Braun (@_MarkusBraun) March 29, 2019

Oddly enough, after the close of the U.S. markets today I found myself reading about the securities fraud case that opened the floodgates for actions against the professionals usually found in proximity to the fraud; underwriters, lenders, lawyers, auditors...
Especially auditors.
That's a story for another day.

If interested see also:
Duuude, This Paul Murphy Fellow Is Taking No Prisoners

Free Dan McCrum
But first, who is Dan McCrum?

Sometimes there's a man... I won't say a hero, 'cause, what's a hero? But sometimes, there's a man.
And I'm talkin' about the Dude here. Sometimes, there's a man, well, he's the man for his time and place. He fits right in there.

Sometimes there's a man, sometimes, there's a man. Well, I lost my train of thought here.
But... aw, hell. I've done introduced it enough.

Where to begin?

The Internet Has Blown the Lid Off This Dan McCrum Guy

There has always been something vaguely sinister about McCrum and his plans for world domination.
We touched on some of this in 2018's "There Has Obviously Been A Coup d'Etat at FT Alphaville (TSLA)":

...There are however two loose strands in this otherwise simple and straightforward recitation:

1) Mr. McCrum has been, how do you say in English, dubious of Elon Musk and Elon's promises and projections, yet in the video above he appears to show empathy for the billionaire.

Dan, if you are being held against your will or are being coerced into making this video, blink twice....

It's obvious that McCrum, if that's even his real name—cough-Blofeld-cough—had covered his Tesla short and was now ready to pump before the next dump and/or was applying for a P.R. job at the house that Musk built.

Today we see the early work product of the small army of internet sleuths who have toiled to bring to light The McCrum Machinations®:

New Wirecard Story!
- 95 per cent of 2016 profits from three opaque partners
- Wirecard's biggest subsidiary is in Dubai, wasn't audited
- Huge profits from Al-Alam Solutions and its handful of staff https://t.co/kybyTtGMTN

— Dan McCrum (@FD) April 24, 2019

No one gives a shit about your fake Stories! #wirecard #fakenews

— DfaCheck (@DfaCheck) April 24, 2019

Fake news, fucking shorting 🤮🤮🤮🤮

— Wirecard Stark (@StarkWirecard) April 24, 2019

Seems your short seller friends get big problems. Still waiting for new fake news from FT/FD. You sould hurry up do bring new very important storys to wirecard 😂

— Josef Fischl (@josef_fischl) April 25, 2019

😳😳😳😳😳  omg, his wife work really for adyen?🤯🤯🤯🤯 pic.twitter.com/0dvM9Iq5wN

— Wirecard Stark (@StarkWirecard) April 25, 2019

Now it's getting ridiculous. Your wife really worked for Ayden? Tell us something about it!  You better get a new job for Donald Trump: His news are very similar! Implausible!

— Frank Dopatka (@FrankDopatka) April 25, 2019

Since when do you know?

— Tobias Happel (@_TobiasHappel) April 24, 2019

Thread
Note especially the use of the puking emoji, used only by the most experienced investigators.

As can be seen, there is so much more to this story that the Financial Times conveniently skips over.
And considering the regulator's ban on short selling Wirecard has expired we can expect more stories on both the positives and negatives as McCrum pumps-n-dumps-n-pumps-n-dumps-n-pumps and perhaps offers to come work for Wirecard.

Here's BaFIN:

Wire­card AG: Gen­er­al Ad­min­is­tra­tive Act pro­hibit­ing the es­tab­lish­ment of net short po­si­tions and in­creas­es in ex­ist­ing net short po­si­tions has ex­pired
The General Administrative Act issued by BaFin was in force until 18 April 2019, 12.00 midnight CET. The Act has now expired.

The FT's Dan McCrum Sells A Book

Not just any book. His book.

This series of tweets is the reason for the post immediately below.

Like Hollywood legend William Goldman showing us how to sell a screenplay, Mr. McCrum shows us how to pitch the reader to spend some time with his narrative.

MONEY MEN is out today!
The thrilling true story of Wirecard’s wild rise and crashing fall charts an investigation like no other. It reveals hidden worlds of short sellers and whistleblowers, pornographers and private militias, hackers and spies. 🧵1/6https://t.co/NPYI4VgdCr

— Dan McCrum (@FD) June 16, 2022

At the heart is a whizz kid in a hurry. He has no idea what he’s doing and his mad schemes backfire. Yet it somehow works and, with a copy of Sun-Tzu’s the art of war under his arm, Wirecard’s ‘chaotic genius’ takes his holidays in a Syrian warzone with Russian Mercenaries. 3/6 pic.twitter.com/5XmEidtBXy

— Dan McCrum (@FD) June 16, 2022

THREAD

Sold. 

Wirecard Flashback II: Stand By Your Man (and bury the analysts in their own exkrement)

Paul Murphy is editor of FT Investigations.
Prior to this gig he was founder and  editor of FT Alphaville.
Before that he wrote about stocks and businesses at The Guardian.
From time to time he stops by FT Alphaville and does some scribing or visits with his former playmate in the mosh pit that was Markets Live, Bryce Elder.

Here's one of his Alphaville posts, published in February 2019, three weeks after Dan McCrum wrote about Wirecard and was subsequently accused of being in the employ of short-sellers and a month before Mr. McCrum and the FT were sued for, among other things, exposing business secrets (not kidding):
"Mensch! Dan McCrum is innocent, ok?"

In March 2019 Mr. Murphy again visited da 'ville and, well, follow the link:
Duuude, This Paul Murphy Fellow Is Taking No Prisoners

From FT Alphaville:

Yeah, we're just capturing this snapshot so it sits on the internet. Forever.
Wirecard stock was quoted at €123.30 at pixel. Here are the sell-side names + target prices, where applicable. H/T Bloomberg...MORE

Memorialized and immortalized.

Fun fact: Mr. Murphy chose as the spot for his vacation home the only country with an AK-47 on the national flag:

Yesterday:
Wirecard's obfuscation

Like Mr. Murphy, we too eschew obsfucation.

So far today:
Wirecard Flashback: "Dan McCrum Did Not Call The Germans Jackbooted Thugs"
German Payments Group: "Wirecard says €1.9bn of cash is missing"

"The Double Life of Former Wirecard Executive Jan Marsalek"

We tried to keep up with the FT's Dan McCrum when he was bulldogging the Wirecard story but eventually ended up posting headlines like "Dan McCrum Did Not Call The Germans Jackbooted Thugs" just to have something to wrap around his articles. That one covered many of them up to March 2019* and I'm sure we missed some. And there were more to come in the weeks and months ahead. 

And today's story from Der Spiegel, March 5 [15 names in the byline]:

Since the collapse of Wirecard, Jan Marsalek has been on the run and is one of the most wanted men in the world. A DER SPIEGEL investigation has revealed how he went underground and that he's a Russian spy. 

 

By Jörg Diehl, Roman Dobrokhotov, Christo Grozev, Martin Hesse, Roman Höfner, Martin Knobbe, Christoph Giesen, Roman Lehberger, Friederike Röhreke, Fabian Schmid, Fidelius Schmid, Marcel Rosenbach, Thomas Schulz, Sandra Sperber und Finn Starken

05.03.2024, 14.49 Uhr

It’s the middle of summer in Nice, and the Mediterranean is lapping gently against the walls of the quay. A man with shortly trimmed dark hair in a black suit and a radiant white shirt is striding briskly toward a cutter. A second man is carrying his case. An attractive woman – tall and blond, her summer dress fluttering in the wind – is pacing on the aft deck of the Poseidon III, laughing nervously. Her name is Natalya Zlobina, and she is the Russian lover of Jan Marsalek, one of the most-wanted men in Europe.

The scene, recorded by a camera at the Port of Nice, becomes a bit blurry. The man in the black suit climbs down a ladder to the Poseidon III and greets the woman with a kiss. She laughs; he seems annoyed. Now, it's possible to recognize his face, well-known these days from the wanted posters plastered on the walls of train stations and airports: It is Jan Marsalek himself, the former COO of Wirecard, which was once listed on Germany’s blue-chip stock index, the DAX. He has been on the run since June 2020.

The moment hardly lasts a minute, and it can be seen in the video that the woman quickly makes it clear to him that the cutter is just part of a little prank. The real ship is rocking in the waves one slip over – a luxurious mega-yacht, of course, where a group of laughing men is waiting. Later, Zlobina will celebrate her 30th birthday here. It is July 6, 2014, the day on which Jan Marsalek’s life will change. The day on which he will meet a man with excellent ties to the Russian military secret service agency GRU, and on which he will apparently begin his second life as a spy.

Marsalek’s story has thus far been more of a financial thriller, already an almost unbelievable tale of fraud, lies and deception. A story of a school dropout rising to become the COO of the financial company Wirecard, a firm considered for a time as one of the most powerful newcomers to the German economy in decades, courted by government ministers and premiers. But Wirecard’s success, as would become clear, was a sham. Billions of euros in account balances evaporated, almost 6,000 people lost their jobs and top executives were arrested.

The drama is now taking a bizarre turn, the plot gets even crazier. Suddenly, the financial thriller has become a spy thriller. And the main character is no longer a charismatic trickster, but a villain straight out of a James Bond movie, cynical and dangerous. A man who is still on the run today. But where is he? And how has he managed to escape the authorities all this time?

Joint reporting by DER SPIEGEL, German public broadcaster ZDF, the Austrian newspaper Der Standard and the Russian investigative platform The Insider has now found some answers. On the basis of confidential documents, mobile phone data, travel records, lab results, investigation files, emails and chats, Marsalek’s story can now be told in its entirety. Marsalek isn’t just the main character in one of Germany’s largest ever financial scandals. He is also – so it would seem from interviews with secret service agents, police investigators and people from his orbit – a spy working for the Kremlin. A man whose activities in his role as an agent endangers lives. Marsalek has apparently commissioned Bulgarian accomplices to track Moscow’s critics across all of Europe, spy on them and possibly even eliminate them. The plot was uncovered at the last moment by the British domestic intelligence agency MI5.

Marsalek’s ties to Russian secret service agencies go back an entire decade. It seems that he was initially recruited by the GRU, but he is also thought to have worked for the KGB’s successor agency, the FSB, in recent years. Zlobina, his girlfriend, is also in touch with men from the security services. Over the several years Marsalek spent as the head of a DAX-listed company, he was apparently able to quietly expand his spying network, traveling to Russia on more than 60 occasions and using six Austrian passports and a diplomatic document to do so.

There are plenty of indications that Marsalek also involved Wirecard in Russian intelligence activities – that money was laundered and mercenaries were paid through the company. Was Marsalek using Germany’s model company to help an adversarial power? Did a DAX-listed company assist in the waging of war? How did all this take place without German intelligence officials taking notice?

Jan Marsalek’s tracks lead into a shrill parallel world that feels at times like a poorly lit B movie. At others, it slips into the horror genre. It includes scenes with flights in MiG fighter jets and rocket-propelled grenades are fired in Syria. And others with champagne parties on the Côte d’Azur and mercenary armies are recruited in Libya. Characters include agents, nude models, mercenaries, politicians, psychopaths and murderers.

And a Russian priest who has astounding similarities to Jan Marsalek.

THE PRIEST
Halfway between Moscow and Rostov-on-Don lies the city of Lipetsk. Founded in the early 18th century by Peter the Great, it is home to half a million residents today. At a traffic circle on the way into the center of town is a charming, 200-year-old chapel with a golden dome and a façade colored brightly in yellow, blue and white. Twice a day except for Tuesdays, a priest named Konstantin Bayazov holds services there. He has a dark beard and shortly trimmed hair. If you watch the priest during his services, you start seeing similarities to Marsalek, and the two men’s birthdays are also just a single year apart. The parallels were also apparently noticed by Russian secret service agents.

Bayazov – the real Bayazov – hasn’t used his own passport since September 2020. Because since then, there has been a second Bayazov, a fake one. The passport file was changed on September 5, 2020, and a new passport was issued with the number 763391844. Both the file and the travel document now include the scowling image of Jan Marsalek....

....MUCH MORE
*If interested see also:
Duuude, This Paul Murphy Fellow Is Taking No Prisoners

Free Dan McCrum
But first, who is Dan McCrum?

Sometimes there's a man... I won't say a hero, 'cause, what's a hero? But sometimes, there's a man.
And I'm talkin' about the Dude here. Sometimes, there's a man, well, he's the man for his time and place. He fits right in there.

Sometimes there's a man, sometimes, there's a man. Well, I lost my train of thought here.
But... aw, hell. I've done introduced it enough.

Where to begin?

Dear Paul Murphy: All is Forgiven, Please Tell The Toronto Sex Trafficking, Hookers and Wirecard Story

The FT's Izabella Kaminska Uncovers a Treacherous Plot

There must have been something in the water* at Alphaville Towers.

First, Paul Murphy and Dan McCrum, Ms Kaminska's former playmates in the mosh pit sandbox that is FT Alphaville break the Wirecard fraud story and now this, which, since it is early days and naming rights are still inexpensive I shall call The Circadian Conspiracy:

Anyone else receiving marketing from restaurants saying they will be opening 1 hour earlier due to the new 10pm rule? If so, I think we need to seriously evaluate the TRUE AGENDA of the regulation. Is Britain being put on CENTRAL EUROPEAN TIME by stealth? Ceci: Brexit betrayal

— Izabella Kaminska (@izakaminska) September 24, 2020

The story apparently begins in the High Tatras, now known as a winter playground along the Slovak-Polish border....and the site of an ancient monastery....
But that is not our story to tell.

Ours goes like this:
August 2, 2018
There Has Obviously Been A Coup d'Etat at FT Alphaville (TSLA)

Or is it a counter-coup?
Or counter-counter-coup?
The story thus far:

As we've pointed out over the years, the tactics from Luttwak's Coup d'État: A Practical Handbook, begin with seizing the means of communication.

1

Izabella Kaminska overthrows the tyrannical reign of Paul Murphy

(think William Tell v. Gessler)

II

Before she has even settled into her comfy editor's chair Dan McCrum declares a new day in the Ville

(think General Haig when Reagan was shot)

Mr. McCrum consolidates his power and ripping a page from the Kaminska playbook takes to video:

There are however two loose strands in this otherwise simple and straightforward recitation:

1) Mr. McCrum has been, how do you say in English, dubious of Elon Musk and Elon's promises and projections, yet in the video above he appears to show empathy for the billionaire.

Dan, if you are being held against your will or are being coerced into making this video, blink twice.

2) What role has David Keohane played in the power struggle? Although ostensibly in Paris and no longer a denizen d'Ville his mysterious comings and goings and travel itineraries worthy of James Bond himself raise troubling questions. Plus we have documentation of his throwing in with Izabella in a couple earlier abortive takeovers.
(think House Tully and House Stark alliance in Game of Thrones)

If we are witnessing a counter and not a counter-counter this is the predicted schedule of events:

DURING the past 23 years, more than half of the world's governments have been overthrown by coups d'etat. Conspirators are increasingly aware that complex societies are vulnerable to attack. Slash a wire, start a rumor, dump LSD into reservoirs:* today any determined guerrilla can stop The System. One man with one bullet can change history. A handful can take over a country.
-TIME

Acid in the FTAV reservoir?

Here's a review of  Luttwak by one of the great Cambridge Marxists of the '30's:

How to Plot Your Takeover
-Eric Hobsbawm at the New York Review of Putsch's

And the actual reason for this post, a cleaned up version of yesterday's Tesla earnings call liveblog:

Tesla Earnings Live, 1st August, 2018

The stock is up.
$343.29 +42.45 (14.11%)....

We'll be back tomorrow with more from Ms Kaminska including Risk, Prop Trading, and a Coded Message.

Questions Americans Are Asking: What Size Are Matthew Klein's Shoes?

From Dan McCrum at FT Alphaville:

We are very sorry to have lost Matt to Barron's, where he will continue to be brilliant. Can you fill his shoes? https://t.co/x0LiHaqYd5 https://t.co/DJ5aSBfHJu

— Dan McCrum (@FD) March 28, 2018

And from Katherine Bell:

I'm thrilled to welcome @M_C_Klein to the Barron's team as our new economics commentator.

— Katherine Bell (@katherineabell) March 28, 2018

The writer is Editor-in-Chief of Barron's Online:

Barron's probably thought they were getting expert commentary on central banking, which they are, but they are also getting so much more. Here are a few Klein von Alphaville posts we've linked to over the years:

Aaarrrggghhh: I Can't Get Matthew Klein's Song Out Of My Head

Leaving the office after posting "Pray For FT Alphaville's Matthew Klein" I found myself humming Jingle Bells à la Klein:

Rolling down the curve
With my Eurodollar strips
Making tons of money
‘til the Fed hikes 50 bps!

...MORE

And again this morning.

I'm losin' it, man.

The last time this happened to me it was a William Shakespeare pastiche.
Of the Bard doing the Hokey Pokey.

So as one of the greats, "The Bruce Dickinson" says:

"Guess what? I got a fever, and the only prescription is more cowbell!"

Via A Way With Words:....MORE 

Investment Banks As Marxist Paradise
I think I could learn to like this young Matthew Klein fellow....

Ooh, ooh: Matthew Klein on New York Fed Head Calling For More Cashout Refi

Expanding on and contextualizing Monday's "New York Fed Chief Dudley Has An Idea — Homeowners Should Tap Into Equity".

In Which FT Alphaville's Matthew Klein Flexes His Clickbait Muscles

And many more. Use the search blog box if interested.

And here is Mr. McCrum's Position Available advert:

FT Alphaville is hiring!

FT Alphaville's Dan McCrum: When the Student Becomes The Master

We looked at the professional style of FT Alphaville's founder Paul Murphy a few times:

Possibly The Funniest (Profitable) Stock Recommendation of All Time (PSON)
...For our younger readers, here is Mr. Subliminal on Donald Trump cheating on his wife Ivana in 1990:

                                                                               Comedian

And here's FT Alphaville's editor, Paul Murphy,

 

Hard-bitten journalist

on former FT Alphaville owner Pearson and its stock, Dec. 1, the day the Financial Times was handed over to Nikkei, while appearing to be having a normal conversation with Alphavillein Bryce Elder:

...PM

(So here’s our advice on the stock at 832p….)

PM

( Run )

BE

...Today, though, the message is dovish. So we’re all choosing to forget about 2016.

PM

( Scarper )

PM

( Get out )

...MUCH MORE

And:
Watch as a Master Trolls the Trolls: Pluto Edition

Some say "Don't feed the trolls".

Hah!

Here Paul Murphy doesn't just chum them in.
He gets 'em close and then shoves the gavage tube down their troll throats to force-feed the little buggers and  create a 42-comment foie gras.

Hah!

So you've got that  Now stir in a bit of Izabella Kaminska, only the second editor in Alphaville's history, as she riles up the crypto crowd:

Why blockchain is a belief system
109 comments
Bitcoin’s fractioning problem
110 comments
Busting the myth that bitcoin is actually an efficient payment mechanism
189 comments

(and many, many more posts)

Mix well and:

Sell all crypto and abandon all blockchain

et voilà:
160 comments

I looked at the story a couple hours after it was posted and "What the hell?..."
There were already something  on the order of  50 comments. Some brilliant:

Kay-El
It's a common enough behaviour to have it's own vocabulary: gazumping and gazundering. Who knows why people do things? I didn't say double spending was possible with proof of work, only gazumping.

And some straight up deranged.

I think even Mr. McCrum was a bit impressed:

Come for the article, stay for the comments https://t.co/Jx7IKs82Yz

— Dan McCrum (@FD) April 13, 2018