Yes. From a legal perspective, we see EY as having definite liability exposure. Only economic factors may make it unwise to take legal action in individual cases. Whether pursuing the matter is worthwhile in your specific case will depend, first of all, on your transaction details, i.e. the timing and amounts of your purchases and/or sales of Wirecard stock. It will also depend on how high your total loss is. In short: The quality of your claims and the amount of your total loss will be the determinative factors. Also, we will need to distinguish between different types of losses: The out-of-pocket damages (resulting from the difference between the price paid for a security and its hypothetical market value), and transaction-based losses on the other. We will review your case free of charge to determine whether taking legal action – and which type of action – is a worthwhile option for you. Please contact us!

Before you join a model case proceedings, you should first have us check whether it makes sense for you to participate in view of your individual situation. We will be happy to review your case free of charge. Write to us using the contact form, email us or call us. We will then send you further information on the options available to you.

Assuming our examination of your case finds that it would make sense for you to accede to the model case proceedings against EY, you basically will have two options to choose from: One is to file a lawsuit through us. Once the model case proceedings commences, you will then automatically become a “Beteiligter” (party) to the proceedings and inasmuch will participate in the model case proceedings together with other aggrieved investors. This will serve to suspend the period of limitations for your claims and you will benefit from any favorable judgment (model case ruling). Moreover, you fundamentally will be entitled to participate in any settlement of the model proceedings. And, more generally, you also will benefit from the fact that a large number of investors are joining forces to assert their rights. After all, there is strength in unity.

An alternative to filing a lawsuit is for investors to register their claims in the model case proceedings. It is true that such registration has disadvantages compared to filing a lawsuit. Thus, you will not be a party to the model case proceedings and inasmuch will not stand to benefit from the binding effect of a favorable model case ruling. On the other hand, registration is a very inexpensive process and, as with a lawsuit, it will allow you to interrupt the running of the statute of limitations regarding your claims. This may make registration a sensible option for many investors.

The order for reference to initiate the model proceedings has already been issued, ie the model case proceedings will begin soon. The Superior Court of Bavaria must now appoint a model case lead plaintiff. It is expected that the model case lead plaintiff will be determined in the course of 2022. The first oral hearing in the model case itself will not take place before the end of 2022, and probably not until 2023. However, deadlines must already be observed: Once the model case lead plaintiff has been determined, a period of 6 months begins within which investors can register their claims for the model proceedings at low cost. Therefore, you should register with us now, free of charge and without obligation, so that we can inform you about the progress and you do not miss the deadlines for filing your claims.

This requires extreme care to be exercised: In principle, you will have until the end of 2023, which is when your claims will become time-barred under the statute of limitations. But: There is a 6-month deadline for filing your claims in the model case proceedings; this cannot be extended and begins running once the model case plaintiff has been designated. Since particularly the registration of claims is an ideal, low-cost opportunity for many investors to benefit from the model case proceedings, we would advise you to register with us already now (free of charge). Because in that case, we will be able to notify you in a timely manner as to when the deadline is set to expire. Otherwise, you run the risk of missing out on this low-cost opportunity to register your claims in the model case proceedings.

That is difficult to say. We consider EY’s chances of defending itself successfully to be very slim. The evidence against them is simply too overwhelming. All things considered, we believe a settlement in 2024 to be realistic, especially since the interest payable by EY during the pendency of the action will lead to a continuous increase in its risks. The reason is that your claims will accrue interest (so-called “Prozesszinsen”) starting from the time you become active and file a lawsuit. This increases the pressure on EY to find a quick solution. That said, there certainly will be no compensation before 2023. Otherwise, this would send the message to all those investors who have not yet asserted their claims to do so ASAP. And the consequence for EY would be that they conjured up a wave of lawsuits from those who have so far failed to act, so that EY would then have to reach another settlement with these latecomers. As you can imagine, this would not be in EY’s interest. Rest assured that EY is well aware of the applicable mechanisms and is receiving competent advice from its lawyers. So under no circumstances will EY conclude a settlement before the end of 2023. Instead, it will refrain from signaling any willingness to settle until at least the end of 2023, continuing its current policy of vehemently denying its own liability by all possible means (also by way of using “litigation PR” to influence the media and public opinion).

The costs will depend on the amount in dispute and on whether you actually file a lawsuit or only register your claims for the model case proceedings. We will be happy to review your claims free of charge and to inform you of the costs that filing a lawsuit or registering in the proceedings would entail.

If you have legal expenses insurance, we also stand ready to obtain confirmation of coverage from the insurer on your behalf – again, free of charge. In this case, you will not bear any costs (apart from a possible deductible) and thus will run no risks.

In addition, we can offer litigation funding insofar as you require it. We will also review this possibility for you free of charge.

Yes. In our experience, legal expenses insurers will cover the costs of proceedings against EY without any problem, at any rate if your legal expenses policy provides coverage for disputes of this type. If you have a legal expenses insurance policy, we will be happy to ask your insurer to provide confirmation of coverage for you. In fact, it is advisable to have this done for you by a lawyer, since you will achieve the desired result in a more effective manner and expeditiously. To this end, we ask you to provide us with the name of your insurance company and your policy number. We will submit the request for confirmation of coverage on your behalf free of charge.

The term “Sammelklage” (consolidated action) is not really defined by German law. Strictly speaking, model case proceedings initiated by capital investors against EY under the Capital Markets Model Case Act (KapMuG) is not a consolidated action, in our understanding – at least not if the term “consolidated action” is taken to mean that several aggrieved parties jointly file a lawsuit. Likewise, model case proceedings under the KapMuG in no way are comparable to a class action lawsuit under the American model (which is based on an opt-out model).

In model case proceedings under the KapMuG, aggrieved investors indeed are jointly involved in the proceedings and inasmuch also assert their rights together and in one and the same proceedings. Before participating in model case proceedings, however, investors must file a conventional lawsuit of their own with the competent regional court. Only subsequently will the investors’ own action be suspended so that they can continue to litigate together with other investors in the model case. As you can see, this procedure does not have much in common with the generally understood concept of a consolidated action and even less with that of a class action. Nevertheless, model case proceedings under the KapMuG offer considerable advantages for investors and are an important building block for ensuring collective legal protection in Germany.

The short answer is “No.” EY’s liability is not limited in terms of the amount that investors can claim.

On the details: There has been some misreporting in the media – some of which still continues – concerning the limitation of EY’s liability. WEISSWERT lawyer Maximilian Weiss already has taken a stand on this in the media and explained the true factual situation. This is as follows: Yes, there is a statutory liability limit for auditors, which is capped at 4 million euros (see Section 323 of the Handelsgesetzbuch (HGB, German Commercial Code)). BUT: This limitation of liability only applies in relation to the audited enterprise and its affiliated companies, in this case the Wirecard Group. Here, it is the “internal” or “inter se” relationship (to use lawyers’ parlance) that is affected. This must be distinguished from the relationship to “external parties,” however: Thus, liability towards investors remains unaffected by the limitation of liability applicable in the internal relationship, i.e. by the limitation of liability stipulated by Section 323 of the Commercial Code. This means that EY cannot invoke this limitation of liability vis-à-vis investors. The statutory limitation of liability therefore plays no role when it comes to investor claims.

No. The correct opponent for the liability claim filed by aggrieved stockholders is
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft (EY) in Germany. The place of jurisdiction is situated in Germany. The foreign affiliated companies of the German EY branch are not conceivably liability defendants in the Wirecard case. This also eliminates the need for proceedings abroad.

Yes. Filing claims in the insolvency proceedings is cost-effective and investors are also very likely to receive at least partial compensation. In particular, we firmly believe that aggrieved investors who acquired Wirecard financial instruments (specifically shares of stock) in the period from April 6th, 2016 until June 18th, 2020, are to be treated as creditors of equal rank alongside the unsecured lending banks. Based on the documentation provided to date by the insolvency administrator, we expect an insolvency dividend in the low double-digit percentage range. This would definitely constitute a successful outcome for insolvency proceedings of this kind. That said, higher levels of recovery should not to be expected unless other parties such as the auditing firm Ernst & Young are held liable as well.

In contrast to the registration of claims in model case proceedings, there is no requirement to have a lawyer file your claims in insolvency proceedings. Fundamentally, you may also file your claims yourself. Bear in mind, however, that your claims must be carefully substantiated. The requirements for this are complex, especially in the Wirecard case. Not only must you present the damage suffered (out-of-pocket damages (resulting from the difference between the price paid for a security and its hypothetical market value) and transaction-based losses), you will also have to substantiate the facts of the case. We therefore strongly recommend that you hire a lawyer to ensure that your claims are actually recognized by the insolvency administrator.

WEISSWERT will register investor claims at a reasonable price on the basis of the Rechtsanwaltsvergütungsgesetz (RVG, Act on the Remuneration of Attorneys). Since the actual costs incurred will depend on the damages you have specifically suffered, we offer to prepare a preliminary calculation of your claim free of charge. Subsequently, we will be happy to inform you of the actual costs you will incur on this basis. Please contact us!

We are of the opinion that Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin, Federal Financial Supervisory Authority) indeed is liable for having misused its power in the Wirecard scandal vis-à-vis investors who acquired Wirecard financial instruments in the period from February 18th, 2019 until June 18th, 2020. Please note that this period is not identical to the period within which we consider EY to bear liability for the acquisition of Wirecard financial instruments.

Nevertheless, our advice to investors in view of the present situation is not to take legal action against BaFin, and instead to await further developments. Taking action against BaFin would be fraught with enormous risks. In a number of other legal proceedings against BaFin – ones not handled by our law firm – the plaintiffs’ claims were dispatched without ceremony. So at present, this would not be a promising avenue for investors to pursue. Our plan, therefore, is not so much to file a lawsuit against BaFin together with a broad mass of investors, but to set the right course instead by initiating a pilot case that would pave the way for potentially filing suit on behalf of additional aggrieved investors at a later point in time – and that only if there is a sufficient chance of success. You are welcome to register with us free of charge. We will keep you up to date on the progress made.