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Wirecard ex-boss Braun arrested as creditors hunt lost billions &#8211; Reuters



Markus Braun turned himself in to prosecutors in Munich on Monday after travelling from Vienna. A judge was due to rule later on whether to keep the 50-year-old Austrian in investigative custody or grant him bail.



In his 18 years in charge Braun transformed an offshoot of the dot.com boom, known for handling payments for online gambling and adult entertainment sites, into a $20 billion-plus ‘fintech’ that won a place in Germany’s blue-chip DAX index.



The former consultant traded in a suit for a black roll-neck and portrayed himself as a tech visionary, telling investors in New York last autumn that Wirecard would increase revenues by six times by 2025 as digital payments boom.



Wirecard’s meteoric rise was, however, accompanied by repeated allegations from whistleblowers, journalists and speculators that its revenue and profits had been pumped up through fake transactions with obscure partners.



The Munich prosecutor’s office said on Tuesday that Braun now stands accused of misrepresenting Wirecard’s accounts and of market manipulation by falsifying income from transactions with so-called third-party acquirers.



Braun, whose lawyer was not available for comment, said last week in a video statement that Wirecard may have been the victim of fraud, without giving details.



Two people familiar with the matter said state prosecutors were also considering issuing an arrest warrant for Jan Marsalek, a board member who was fired on Monday. A lawyer for Marsalek was not available for comment.



Wirecard’s implosion was described on Monday as a “total disaster” by Germany’s financial regulator, who has come under fire for pursuing its critics and not the company.



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An external audit by KPMG in April had failed to verify cash balances, questioned Wirecard’s acquisition accounting and was unable to trace millions in reported cash advances to merchants.



Braun, who said at the time that the allegations were not confirmed “in every point”, quit last week after in-house auditor EY refused to sign Wirecard’s 2019 accounts.



Wirecard’s shares have since shed more than 80% and its only listed bond is trading at 25 cents on the euro, indicating that investors expect to lose most of their money.



New CEO James Freis, a former financial investigator at the U.S. Treasury and compliance chief at the Frankfurt Stock Exchange, has opened urgent talks with some 15 banks that have lent 1.75 billion euros to Wirecard.



With Wirecard having failed to file audited financials, the banking consortium led by Germany’s Commerzbank (<a href="https://www.reuters.com/companies/CBKG.DE">CBKG.DE</a>) could call in the loans at any time.



Sources close to the talks said it was doubtful that Wirecard can continue as a going concern, while risks of litigation ruled out asset sales for now.



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The main question is whether to allow the firm to keep operating for a couple of weeks, to give more time to allow for a higher recovery, one source familiar with the talks said.



More than 5,000 staff are due to be paid at the end of June, and bankers would decide before then whether to pull the plug and trigger insolvency, the source added.



Wirecard is being advised by investment bank Houlihan Lokey and the creditors by law firm Allen &amp; Overy. Both declined comment.



Writing by Douglas Busvine; Editing by Alexander Smith

COVID-19: Investing for Roubini’s Greater Depression

Wirecard ex-boss Braun arrested as creditors hunt lost billions

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NEW YORK (Reuters) &#8211; Wall Street’s three major indexes gained ground on Monday with the biggest boost from technology stocks as investors appeared to look past the potential economic impact of rising coronavirus cases in the United States and other major economies.



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FILE PHOTO: Traders exit the 11 Wall St. door of the New York Stock Exchange (NYSE) in New York City, New York, U.S., June 11, 2020. REUTERS/Brendan McDermid



The World Health Organization reported a record rise in global coronavirus cases on Sunday, driving demand for perceived safe havens including gold and longer-term U.S. Treasuries. [US/][GOL/]



While New York City on Monday celebrated the lifting of many coronavirus restrictions, a dozen states in the U.S. South and Southwest reported record increases in new cases with 10% to 20% of people testing positive in some.



However White House economic adviser Larry Kudlow told CNBC earlier in the day that there was no second wave of the pandemic and that it is unlikely there will be widespread shutdowns across the country.



Investors were also looking past the current quarter and into 2021, when earnings are expected to start improving according to Sam Stovall, chief investment strategist at CFRA.



Analysts expect a 42.7% drop in earnings per share for the second quarter, according to estimates gathered by Refinitiv.



“It can’t get much worse than this. People are hoping that and concluding that you can’t injure yourself by falling out of a basement window,” said Stovall.



But he asked, “How can you really get optimistic about what you don’t know? &#8230; Wall Street looks to the other side of the valley but we still don’t know how low or wide the valley is.”



At 2:18 p.m. ET, the Dow Jones Industrial Average rose 72.31 points, or 0.28%, to 25,943.77, the S&amp;P 500 gained 12.51 points, or 0.40%, to 3,110.25 and the Nasdaq Composite added 80.83 points, or 0.81%, to 10,026.96.



Of the S&amp;P’s 11 major sectors, technology was leading with a 1.6% gain. However the next biggest gainer was the defensive utilities sector, up 1.3%, suggesting that investors were not throwing all caution to the wind.



The market took a step back on Friday after Apple Inc’s move to temporarily shut some U.S. stores again underscored concerns of a delay in the recovery.



But Apple shares were up more than 2% on Monday and trading at record highs as the company announced new products at its annual conference for software developers.



Travel-related stocks were some of the weakest as investors in those companies have been hit hard in the past by the virus lockdowns.



The S&amp;P 1500 airlines index dropped 0.7%, while shares of cruise operators Norwegian Cruise Line and Royal Caribbean Cruises both tumbled about 7%.



The S&amp;P 500 has climbed some 42% from its March lows and the Nasdaq hit a record high earlier this month thanks to trillions of dollars in monetary and fiscal support, the reopening of businesses and improving economic data.



The S&amp;P 500 was last about 8% off its Feb. 19 record high.



U.S.-based meat processor Tyson Inc slipped 2.8% as China’s customs authority suspended imports of poultry products from a plant owned by the company that had been hit by the coronavirus.



American Airlines Group Inc fell 7% as it planned to secure $3.5 billion in new financing by selling shares and convertible senior notes to boost liquidity.Virgin Galactic Holdings Inc soared 12.5% as it signed up with NASA to develop a program to promote private missions to the International Space Station.



Declining issues outnumbered advancing ones on the NYSE by a 1.06-to-1 ratio; on Nasdaq, a 1.04-to-1 ratio favored advancers.



The S&amp;P 500 posted 12 new 52-week highs and no new lows; the Nasdaq Composite recorded 110 new highs and seven new lows.

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The Rise Of Socially Conscious Investing

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Apple stock hits all-time high: CNBC After Hours

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Wirecard ex-boss Braun arrested as creditors hunt lost billions

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The Rise Of Socially Conscious Investing

Who Funds The Police?

Apple stock hits all-time high: CNBC After Hours

What’s Next For The U.S. Economy: Jim O’Neill

Wirecard ex-boss Braun arrested as creditors hunt lost billions

Wall Street rises as investors look beyond rising virus cases – Reuters

We went inside Hong Kong Disneyland during a global pandemic | CNBC Reports

Why Diesel Cars Are Disappearing

Can Hollywood Go Virtual After Coronavirus?

Is Employee Tracking Doing More Harm Than Good?

Hertz calls off its controversial $500 million stock sale: CNBC After Hours

Can the airline sector recover? | CNBC International

How Police Track Protesters With High-Tech Surveillance Tools

The future of urban mobility after the pandemic | CNBC Reports

What’s Next For The U.S. Economy: Mohamed El-Erian

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