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Rules instead of integrity

Anyone who thought Wirecard was a typical fraud scandal can learn something new every day. Last Friday, it came to light that the head of the auditing supervisory authority APAS was speculating with Wirecard shares, although investigations were already underway against EY as an auditor of Wirecard. Although a scandal was looming, at the end of which everyone would look like fools, especially those who had a supervisory function. Cool timing, one could say. Clever. What does his employer say after the head of the authority has admitted trading Wirecard shares right in the middle of criminal investigations? Minister of Economics Altmaier is quoted in the press as saying, “We will talk to the parties involved and we will check very carefully whether the applicable regulations have been observed and whether it is necessary to draw conclusions from this”, and “But care comes before ‘rush jobs'”.


There are two problems here: the first is ethical, and has to do with integrity, or lack thereof. The second is a lack of butt in the pants, as we say in German. 


The first problem belongs to the head supervisor of APAS. It is scandalous that there is no compliance in an authority that regulates which financial transactions employees are still allowed to make when they have access to details that relate to criminal investigations into incidents with companies that may affect the company’s share price. If any definition of an insider applies, it does here.  Now one can imagine that rules for such constellations would probably be extremely cumbersome and all eventualities could not be captured in rules at all. This is exactly where integrity comes into play.

Why didn’t the head of the authority come to the conclusion that, to use an old-fashioned word, it is unseemly (German: unanständig) to take advantage of a situation that gave him his job? Does it need rules for that? What about the gamblers in the ranks of BaFin? Do we need rules that make these supervisors understand that they discredit themselves, their function, and their authority when they trade in shares of a company that is officially viewed as a “causa”? Bankers are always reproached for a lack of ethical sensibilities (“we are here to find tax loopholes, our clients pay us for them”). What about the supervisory authorities? How clumsy is behavior that asks for rules where one would expect common sense?


Peter Altmaier has the second problem. Anyone who, as a supervisor or manager (and the latter he is as the supreme boss of a large apparatus) does not immediately release this wheeler-dealer as head of the authorities, has lost his authority. The man has admitted to trading Wirecard shares himself. What else does Altmaier want to check? Oh yes, whether the rules were observed. Again this question about rules. Once again: integrity does not ask for rules. 


There are not many management situations in which you can say “there is only one thing you can do”. But this one is exactly one of them. Fire the head of the authority immediately, even if it’s just a matter of correcting the impression abroad that Wirecard is an inconvenience to the German authorities and it’s best to cover a large cloth over it. It will soon be Christmas. And let the head of the authority get a lawyer after all. That won’t clear him of the accusation of being a blatant miscast as head of the authorities. We have now seen enough flaccid and inconsistent handling of the Wirecard affair.

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