In a significant development within the Wirecard scandal, the Higher Bavarian Regional Court (Bayerisches Oberstes Landesgericht, “BayObLG”) issued a partial model decision on 28 February 2025, addressing the role of Ernst & Young (“EY”) in the affair. The court determined that the prerequisites for claims against EY, the auditing firm responsible for certifying Wirecard's financial statements from 2014 to 2018, cannot be met within the current model proceedings.
Background of the Proceedings
The model case proceedings, initiated by the Munich I District Court on 14 March 2022, aimed to establish binding decisions on key issues related to Wirecard's alleged violations in its financial reporting and EY's potential breaches of auditing duties. Numerous investors have filed lawsuits seeking damages for losses incurred due to the collapse of Wirecard in 2020.
Court's Rationale
The BayObLG concluded that claims against EY do not fall within the scope of the Capital Investor Model Proceedings Act (“KapMuG”) in its version applicable until 19 July 2024. The court emphasized that EY's audit opinions, while significant, do not constitute direct public capital market information as required by KapMuG. Instead, these opinions were communicated to Wirecard AG, which then disseminated them to the public. Consequently, the necessary direct connection between EY's actions and public capital market information is lacking, rendering the related claims inadmissible in the model proceedings.
Implications for Investors
This decision represents a setback for investors hoping to pursue claims against EY within the framework of the model proceedings. Legal representatives of the investors have expressed disagreement with the ruling and intend to file an appeal with the Federal Court of Justice (Bundesgerichtshof).
Next Steps
While the court's decision excludes EY from the current model proceedings, it does not preclude investors from pursuing individual lawsuits against the auditing firm. Additionally, the model proceedings will continue to address claims against other parties involved in the Wirecard scandal.
This development underscores the complexities and challenges investors face in seeking redress following the Wirecard collapse. Deminor is not involved in proceedings relating to the Wirecard scandal but is reporting on relevant developments. We are happy to address any questions on this or other investment recovery cases you may have and are available to discuss these cases.
Written by:
Dr. Stephan Klebes
Senior Legal Counsel
