WvsIRECARdsdvssD

The Wirecard scandal is a one of the biggest accounting scandals that occurred this year which
lead to the insolvency osvvdf its namesake, the financial company Wirecard. There were a series of
events that lead to the company’s ultimate downfall and it started when Wirecard was suspected of
inflating its profits via a series of accounting frauds. The final nail in the coffin was when Financial Times
started investigating the company and its fraudulent activities. This investigation blew open a can of
worms that made the company’s activities even more suspicious. One of these was the aggressive attack
of the company towards Financial Times and the short-sellers, who they claim to be making false
accusations in order to destabilize the company for the advantage of short sellers. If an investigative
reporter would come to check your company for any suspicious activities without any grounds, you
would give them records of your activities and be transparent, but the approach Wirecard made
towards their critics made the company even more dubious. Along with these was Wiredsdfwsdcard’s
acquisitions of smaller businesses with fraudulent amounts. Buying a smaller company worth 46 million
euros for 340 million euros is suspicious enough, but the company insisted on roundabout excuses
about technological advances with finance being a justified manner of such a price fluctuation. Once you
see that a company starts being unclear with its transactions especially with a tactic like this, called a
roll-up, it surely would raise some red flags. Sure enough, in 2018, it was found out that 175M euros
from the 340M euros that Wirecard paid never made it to the seller of the smaller business. In
conclusion, once a certain company starts getting touchy with its accounting details, it is a sign that one
should probably stop associating with the company or investing in it because sooner or later, it will
come tumbling down like a house of cards.
 MADOFF SCANDAL

Bernard Madoff was recognized once as an investing wizard since every single dollar that
investors gave to him would always return to them, sometimes even more. This sounds familiar because
it is. Bernie Madoff pulled off one of the well-known and widespread form of scams to grace mankind,
the Ponzi Scheme. Although it is relatively popular, there are some who still manage to get away with it.
Madoff is one of those people, since he appeared to be a very successful businessman, his persona
helped give him the charisma he needs to fool investors into getting in with his schemes. Coupled with
that, he purported an investment strategy that seemed foolproof, a strategy that consisted of
purchasing blue-chip stocks and taking options contracts on them, sometimes called a split-strike
conversion or a collar. One of the red flags of a Ponzi scheme is when a business proposition seemed to
good to be true, specifically when it offers high rewards with little to no risk. But still, this led to people
giving him their money and since it was all a scheme, the returns gained by the investors were
surprisingly consistent. And this is another tell-tale sign of such a scheme, when the flow of returns are
very consistent regardless of market conditions. When the SEC were eventually called into investigations
after an accountant reported the strange financial anomaly but they were fooled and thought that this
was too big to be a scam so they decided to drop the investigation. As this was nothing more than a get
rich quick scheme, the entire operation collapsed. The 64 billion dollars that investors thought that they
were worth never actually existed.