SCHIRP & PARTNER Rechtsanwälte mbB
SCHIRP & PARTNER Rechtsanwälte mbB: German Federal Cabinet approves Financial Market Integrity Strengthening Act (FISG). Investor advocates criticize the law as insufficient and toothless
DGAP-News: SCHIRP & PARTNER Rechtsanwälte mbB
/ Key word(s): Legal Matter/Statement
Federal Cabinet approves Financial Market Integrity Strengthening Act (FISG) -. Investor advocates criticize the law as “insufficient and toothless”. Yesterday, the Federal Cabinet approved the draft Financial Market Integrity Strengthening Act (FISG). This law is intended to draw lessons from the WIRECARD case and the failure of the auditors there, Ernst & Young (EY). From view of investor advocates, the law is however completely insufficient. Attorney Dr. Wolfgang Schirp, Berlin, who represents numerous WIRECARD shareholders against EY: “This draft is pure cosmetics. The integrity of the financial market is not strengthened. The large auditing firms from the circle of the “Big Four” can continue to do what they want and will not be held accountable. Cases like WIRECARD can happen again at any time.” University professor Dr. Kai-Oliver Knops from Hamburg, together with Dr. Schirp, proposed in a technical article as early as October 2020 to strictly separate the commissioning of the auditors on the one hand and the performance/payment of the audit on the other. Prof. Dr. Knops: “We proposed to install an external contracting party that selects and engages the auditors and that is not identical with the company to be audited. This is the only way to eliminate the basic problem of “Whose bread I eat, whose song I sing”. In the case of DAX companies, this external contracting party could be Deutsche Börse itself. But: This separation between the commissioning and the performance/payment of the audit does not take place now, according to the current draft of the FISG. So the underlying conflicts of interest are not addressed at all, let alone eliminated. The compulsory rotation of auditors after 10 years, which is now in the law, is not a sufficient substitute for this.” Dr. Wolfgang Schirp adds: “The alleged “tightening” of civil liability in the current FISG is also completely insufficient. What would be required is full liability of auditors to all market participants who have relied on their work. For example, EY would be required to compensate all WIRECARD shareholders who trusted in the auditing of the financial statements. But the current draft of the FISG does not provide for that. In short, a complete lobbying success for the “big four”. Despite the Wirecard disaster, nothing changes at all. This is also no way to strengthen confidence in Germany as a financial center.” For further information is available: Attorney Dr. Wolfgang Schirp, Schirp & partner attorneys mbB, Leipziger Platz 9, D – 10117 Berlin, Tel. 0049-30-3276170 and 0049-179-5320213, e-mail schirp@schirp.com, URL: www.schirp.com Translated with www.DeepL.com/Translator (free version)
17.12.2020 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG. |