Felix Hufeld, head of Germany’s financial watchdog Federal Financial Supervisory Authority (BaFin), and his deputy, Elisabeth Roegele, have been dismissed over their handling of the Wirecard debacle, according to a Reuters report on Friday (Jan. 29).
Germany Finance Minister Olaf Scholz said the agency needed new leadership after months of intensifying criticism over the agency’s handling of Wirecard.
“The Wirecard scandal has revealed that Germany’s financial supervision needs a reorganization,” the finance ministry said in a statement, per Reuters.
Wirecard, the global supplier of electronic payment and risk management services, collapsed in June owing creditors nearly $4 billion. The company started by processing payments for gambling and pornography before becoming a fast-growing FinTech.
The decision to replace Hufeld precedes the results of a ministry examination of a restructuring of the agency to be presented next week, Reuters indicated.
Suggestions that Hufeld should step down came to a head on Thursday (Jan. 28) after a BaFin employee fell under suspicion of being connected to Wirecard insider trading. Wirecard’s downward spiral brought attention to BaFin’s inability to detect the fraud despite many warnings.
In the ministry statement, Hufeld said that BaFin had grown in significance and relevance during his six years as president, per Reuters. “Now there are other tasks to tackle,” he said.
“Finally we see personnel consequences,” said Frank Schaeffler, a lawmaker for the opposition Free Democrats and member of BaFin’s administrative board. “But this can only be the beginning. We need a fresh start.”
Similarly, Fabio de Masi, a lawmaker from the opposition Left party, said Hufeld’s departure was “overdue” and called on BaFin Vice President Elisabeth Roegele, who leads securities supervision, to also step down.
Two men from Austria — a former senior official with the Austrian secret service and a former right-wing MP — were arrested in Vienna for the assisting corrupt Wirecard exec Jan Marsalek escape arrest. Marsalek, the former second in command at Wirecard, is wanted for money-laundering.
Commerzbank reportedly had warned about Wirecard’s illicit activity early in 2020, before the payment giant’s scandal of missing money came to light later in the year. The warning came from findings of an internal review the bank had been doing since early 2019.