On February 18, 2019, Germany’s financial regulator did something it had never done before. BaFin banned investors from building new net short positions in Wirecard AG, one company whose shares were falling under the weight of fraud reporting. Not a sector. Not the market. One firm.
The ban was supposed to last two months. The fraud lasted sixteen more months.
By June 2020, Wirecard had collapsed with €1.9 billion missing from its balance sheet, money the company later admitted probably did not exist. The reporters were right. The people betting against the stock were right. The regulator had spent a crucial stretch treating the warning lights as the threat.
The ban that had no precedent
The order was narrow and strange. BaFin prohibited the creation or increase of net short positions in Wirecard shares from February 18 to April 18, 2019, citing a threat to market confidence in Germany. The European Securities and Markets Authority approved the emergency measure, but even that approval made clear how unusual the intervention was: a market-wide tool applied to one listed company.
Short-sellers were not attacking a healthy business at random. They were betting that Wirecard’s accounts did not add up. By February 2019, Dan McCrum at the Financial Times had spent years reporting on suspicious accounting at the German payments company, including claims about its Asian subsidiaries and documents from a whistleblower in Singapore.
The stock fell hard. BaFin’s response was to protect the falling stock, not to make the accounting allegations the center of its own public action.
A regulator picking a side
The short-selling ban was the clearest signal, but it was not the only one. BaFin also filed criminal complaints against two Financial Times journalists on suspicion of market manipulation, alleging that reporting on Wirecard may have been coordinated with short-sellers.
That accusation hung over McCrum and his colleague Stefania Palma while the company they were investigating continued to trade as a German technology champion. Years later, BaFin’s own leadership would describe the Wirecard episode as a failure that changed how the agency approached supervision.
Wirecard had also gone after the paper directly. As Business Insider reported in March 2019, the company sued over the Financial Times coverage, claiming the articles misused or misrepresented business secrets. The regulator’s posture lined up neatly with the company’s.
The inversion was stark. A financial watchdog exists to protect investors from false markets. In Wirecard’s case, the watchdog protected a false market from the people saying it was false.
The thing BaFin did not look at
The Financial Times stories were specific. They described possible round-tripping, a method in which money is moved through a chain of entities to create the appearance of real revenue. They named people, places, documents, and subsidiaries. The allegations were not vague market gossip.
BaFin treated the leak and the share-price fall as the market problem. The deeper question was whether Wirecard’s reported profits and cash balances were real.
That question was left largely to the company’s auditors and to the structure of German accounting enforcement. EY had signed off on Wirecard’s accounts for years. When KPMG was later brought in for a special review, its April 2020 report was unable to resolve central questions around the third-party acquiring business that had supposedly generated much of Wirecard’s profit.
The missing money was said to be held in escrow accounts in the Philippines. By the time anyone outside Wirecard could not verify those accounts, the fraud was almost at its end.
Seven days in June
In mid-June 2020, EY refused to sign Wirecard’s 2019 accounts because it could not confirm €1.9 billion in cash balances. The stock collapsed. CEO Markus Braun resigned. Wirecard then said there was a prevailing likelihood that the money did not exist.
On June 25, 2020, Wirecard filed for insolvency in Munich. It became the first sitting member of Germany’s DAX index to fail that way.
The Philippine banks BDO and BPI said documents purporting to show Wirecard accounts at their institutions were false. The Bangko Sentral ng Pilipinas said the missing funds had not entered the Philippine financial system. The escrow accounts were ghosts. The cash had never been there.
Jan Marsalek, Wirecard’s chief operating officer and the executive closest to the supposed Asian partners, disappeared in late June. Germany’s federal criminal police later listed him in a wanted notice connected to suspected fraud, breach of trust, and other economic offences.
The reporter the state tried to prosecute
McCrum had begun looking at Wirecard in 2014, after questions surfaced about margins that seemed too high for the payments business Wirecard claimed to run. His first major series ran in 2015. For the next five years, he and other Financial Times reporters worked through shell entities, fake-looking clients, and bank confirmations that did not hold up.
During that period, McCrum was placed under surveillance by private investigators hired by Wirecard. He was also one of the journalists targeted by the criminal complaint triggered by BaFin’s suspicions. The New Yorker’s 2023 reconstruction described how much of the German establishment treated the reporting as an attack on a national champion rather than as a warning.
There’s a detailed video by Silicon Canals that traces the full arc of this scandal, including the intelligence connections that made it one of Europe’s most brazen frauds. It is worth a look for the broader context beyond the regulatory failure.
The criminal investigation into the journalists produced no charges. Wirecard produced no money in the Philippine accounts. The market eventually priced in what BaFin had tried to suppress.
What the precedent left behind
The deeper part of the story became stranger after Marsalek vanished. Later reporting connected him to Russian intelligence circles and to sensitive material linked to the Novichok nerve agent used in the 2018 Salisbury attack. What had looked like an accounting scandal widened into a story about espionage, surveillance, and state power.
In March 2025, an Old Bailey jury convicted three Bulgarians of spying for Russia in a case prosecutors said was directed by Marsalek from Moscow. The court heard that the network targeted journalists, dissidents, and military sites across Europe.
BaFin has not repeated the Wirecard single-stock short-selling ban. Felix Hufeld, BaFin’s president at the time, resigned in January 2021. Germany later reworked financial reporting supervision and gave BaFin a more direct role over listed-company accounts.
The fraud now sits in the record as one of the largest in postwar German corporate history. The regulatory failure sits beside it as a warning about institutional reflexes: when the first instinct is to defend confidence, the thing being defended may be the illusion itself.
Space Daily has written before about organisms that grow vast and invisible underground, betrayed only by what dies at the surface, and about experiments where time itself goes wrong in the dark. Wirecard had both qualities. It was hidden in plain sight, and the official clock was badly slow.
The short-selling ban expired on April 18, 2019. By then the fraud had fifteen months left to run. The reporters kept publishing. The money kept not being in the Philippines. And somewhere around Wirecard’s orbit, Marsalek was already moving toward the vanishing point.
