Ethics Book Review: Money Men

Tuesday 20 September 2022

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Author: Miles Galaska 

At its height, Wirecard was a symbol of a potential new direction of the German economy. In a country dominated by manufacturing giants, Wirecard was seen as a Silicon-Valley style new tech company, promising a future of innovation and growth. The company’s rise in the last part of the 10s was particularly rapid: it joined the Frankfurt stock exchange in 2017, in 2018 it was elevated to the prestigious DAX, and towards the end of 2019 was planning a takeover of Germany’s premiere financial institution, Deutche Bank.

Now, the company is a byword for corporate greed, fraud and malpractice. In this forensic work, Dan McCrum lays out how Wirecard’s entire business practice was built on sand and the underhanded, and frequently amateurish, tactics used to support the charade. The book questions the role of auditors, regulators and large swathes of the media, who failed to ask difficult questions that could have identified these issues ahead of time. Instead, whilst Wirecard’s star continued to rise, the diligent work of McCrum and associates at the Financial Times, aided by a motley collection of shortsellers, were working to uncover the truth.

The work goes over the history of Wirecard’s business and suggests that the descent into illegality was a result of a gradual compromise of morals, from its early days facilitating pornography payments, skirting the lines of legality through gambling payments in the US, ultimately leading to the large-scale accounting fraud that would bring the company down.

Possibly the most shocking revelations are the lengths that Wirecard went to in order to cover up their fraud, including threats, intimidation, and misinformation. This book will be of interest to all investment practitioners. It presents a compelling story, well-told, and raises universal challenges around wishful thinking, the importance of due diligence, and the consequences of unchecked greed.

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