Lawsuit against EY: 13,000 investors are demanding damages of 700 million euros

Lawsuit against EY: 13,000 investors are demanding damages of 700 million euros

According to a report by www.tagesschau.de,

For years, EY had examined the fraudulent balance sheets of the payment processor Wirecard and did not raise any objections. That's why over 13,000 investors have now filed a lawsuit - and are demanding damages amounting to 700 million euros.

After the collapse of the payment service provider Wirecard, the German Association for the Protection of Securities Holdings (DSW) filed a claim for damages against the auditor EY on behalf of more than 13,000 institutional and private investors. The volume is over 700 million euros, said DSW. The 80,000-page lawsuit with attachments was filed with the Munich Regional Court. The costs of the lawsuit will therefore be borne by British litigation financiers who, if successful, will receive part of the money sued for. Thanks to their involvement and a Dutch foundation model, investors would have no risk.

EY could have “easily detected” fraud
DSW lawyers Klaus Nieding and Andreas Lang explained that EY had failed to convince itself of the existence of the third-party business through its own checks. Instead, the responsible auditors relied on the statements of Wirecard management.

The lawsuit against EY would have far-reaching effects on the financial industry. If EY suffers financial damage as a result of the lawsuit, this could lead to a shift in market share in the accounting industry. Additionally, this could affect investor confidence in accounting firms overall and potentially lead to stricter regulations and increased regulation in the industry.

Wirecard's collapse and subsequent legal action have already led to a loss of confidence among investors worldwide. This new damages process could serve to further undermine trust in the integrity and practices of accounting firms.

The financial industry is already confronted with a variety of regulatory requirements. If a lawsuit were to be decided against EY and result in a high amount of damages, this could lead to a further tightening of regulatory standards.

It remains to be seen how the compensation process will develop and what impact it will have on the market and the financial industry in the long term. Those involved and outside observers will follow the proceedings with interest.