Money Men | Dan McCrum

Summary of: Money Men: A Hot Startup, A Billion Dollar Fraud, A Fight for the Truth
By: Dan McCrum

Introduction

Enter the world of Wirecard, a company that built its fortune on fraudulent practices and shady dealings, as revealed in Dan McCrum’s book ‘Money Men: A Hot Startup, A Billion Dollar Fraud, A Fight for the Truth’. This gripping exposé uncovers the rise and fall of the tech giant, which began with a humble foray into online payments and quickly became ensnared in allegations of money laundering, grey market transactions, and cooked books. Journey alongside Financial Times journalist Dan McCrum who uncovers the dark truths behind the company’s seemingly meteoric success, as he interviews company insiders, navigates a web of subterfuge, and slowly unravels the threads of an intricate fabric of lies spun by Wirecard’s management.

Wirecard’s Shady Path to Success

In the late ’90s, Wirecard started as just a small company with big ambitions and eventually became a leading provider of electronic payment solutions. Its founder, Paul Bauer-Schlichtegroll, initially ventured into the online porn business, but soon realized the potential in online direct debit payments. Wirecard dabbled in the shady world of online gambling, taking advantage of regulatory grey areas and banks’ reluctance to handle such transactions. Bauer-Schlichtegroll opted out before long, avoiding an expensive IPO by orchestrating a reverse takeover and letting Dr. Markus Braun and Jan Marsalek take charge. Despite their innovative approach, Marsalek’s electronic payment system never worked until they worked together to find a solution, catapulting the now-public company to the top.

Wirecard’s Financial Shenanigans

In 2014, Dan McCrum, a Financial Times reporter, met with hedge fund manager Leo Perry who handed him a stack of notes proving that Wirecard, a technology company listed on the Frankfurt Stock Exchange, was faking its profits. McCrum traveled to Bahrain to investigate one of Wirecard’s business partners and discovered that the company was possibly buying fake assets. Further investigation revealed that Wirecard was in massive debt and hiding its true financial situation. When McCrum eventually interviewed CEO Markus Braun, he avoided answering questions about Wirecard’s financial practices.

Wirecard Scandal Unravels

In 2016, Financial Times journalist Dan McCrum receives information about the illegalities of Wirecard, a company previously believed to be a leading force in the payments industry. Upon review of a report exposing a grand money laundering scheme at the company, McCrum hastily posts a blog article about it without consulting the lawyers. As a result, the Financial Times faces litigation, and McCrum gets a bad reputation. On top of it, Wirecard’s CTO Jan Marsalek tries to con the Financial Times into printing a story that would boost its share price, and the fake apology letter surfaces, casting doubts on the authenticity of the whistleblowers.

Insider Trading at Wirecard

Pav Gill, a legal counsel at Wirecard’s Asia headquarters, discovers sketchy accounting practices and tips off the head of compliance. However, he is replaced during the investigation and eventually leaves the company with 70 gigabytes of files and email archives. Gill works with his mother to contact Dan McCrum with the data, which leads to a story about Wirecard’s fraudulent practices being published by FT. The stress of the situation takes a toll on Gill and his mother, with Evelyn experiencing a stress-induced seizure and being diagnosed with a tumor in her lungs.

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