German prosecutors drop probe into FT over Wirecard

BERLIN, Sept 3- German prosecutors have dropped their investigation into journalists of the Financial Times in connection with its reporting on the corporate fraud at payments firm Wirecard that eventually led to its collapse. The Munich public prosecutors office said it has discontinued the proceedings as it has not found enough evidence to support the…

BERLIN, Sept 3 (Reuters) – German prosecutors have dropped

their investigation into journalists of the Financial Times in

connection with its reporting on the corporate fraud at payments

firm Wirecard that eventually led to its collapse.

The Munich public prosecutors office said it hasdiscontinued the proceedings as it has not found enough evidenceto support the case.

The prosecutors launched an investigation into a FinancialTimes journalist in February 2019, prompting the newspaper toreject any allegations against the newspaper or its journalistsof market manipulation or unethical reporting.

The FT said in a statement carried in its story of theinvestigation being dropped: “We welcome this decision. Theunfounded criminal complaint should never have been made by(regulator) BaFin and should have been dropped by Munichprosecutors far sooner. Our reporters acted courageously andresponsibly in the public interest throughout.”

Wirecard had filed charges against the newspaper onsuspicion of market manipulation, accusing them of cooperatingwith short sellers to help them to profit from share price fallsafter the reports on the company became public.

The prosecutors said on Thursday that the newspaper’sreporting had been fundamentally correct and they had notestablished direct contact with short sellers. They said theinvestigation would be continued against the short sellers.

Wirecard’s demise has embarrassed Germany’s government,which prides itself on a reputation for rectitude andreliability, amid criticism that authorities ignored red flags.

Finance Minister Olaf Scholz, responsible for the financialwatchdog, told business newspaper Handelsblatt he was tighteningrules on securities transactions for BaFin employees.

Handelsblatt said BaFin employees had increased theirtrading in Wirecard shares and share derivatives in the monthsbefore the firm’s collapse.

“Even the mere appearance of conflicts of interest must beavoided,” Scholz told Handelsblatt, referring to share trading.

“For this reason, the financial supervisory authority willissue additional regulations for employee transactions,” headded. “In the ministry, too, we will create stricter rules”.

On Tuesday, German lawmakers launched a parliamentaryinquiry into Wirecard’s collapse in an effort to force thegovernment to reveal more about a failure to avert the country’sbiggest post-war corporate fraud.

(Reporting by Ralf Bode, Emma Thomasson and Paul Carrel;Editing by Alison Williams)