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Ex-CEO of Wirecard arrested in case over missing billions – CP24 Toronto's Breaking News



BERLIN — The former CEO of German payment service provider Wirecard has been arrested, accused of inflating the company’s balance sheet in an accounting scandal that centres on a missing sum of 1.9 billion euros ($2.1 billion), prosecutors in Munich said Tuesday.

Markus Braun resigned on Friday after the company disclosed that auditors couldn’t find accounts containing the money. On Monday, Wirecard said it has concluded that the money probably doesn’t exist.

Prosecutors said a court issued an arrest warrant shortly afterward and Braun turned himself in on Monday evening.

He is accused of inflating the company’s balance sheet and revenue using sham income from business with third-party acquirers, “possibly in collaboration with further perpetrators,” in order to “portray the company as financially stronger and more attractive for investors and clients,” they said in a statement.

Braun was arrested on suspicion of incorrect statements of data and market manipulation.

Wirecard AG was once regarded as a star of the growing financial technology sector, but its shares have fallen sharply after the company became the subject of multiple Financial Times reports about accounting irregularities in its Asian operations. Wirecard disputed the reports, which started in February 2019, and said it was the victim of speculators.

On Monday the company announced the firing of its chief operating officer, Jan Marsalek, who had been suspended from the management board last week. German news agency dpa reported that Marsalek had been in charge of overseeing daily operations including in Southeast Asia, where the possible fraud occurred.

Two Philippine banks that were said to hold the money in escrow accounts said in recent days that they had no dealings with Wirecard, and the country’s central bank chief said none of the missing money entered the Philippines’ financial system.

In the early hours of Monday, Wirecard said its management board “assesses on the basis of further examination that there is a prevailing likelihood that the bank trust account balances in the amount of 1.9 billion euros do not exist.”

Wirecard said it is in “constructive discussions” with banks on continuing credit lines, and is “assessing options for a sustainable financing strategy for the company.” It said it is examining other possible measures to keep the business going, including restructuring and disposing of business units.

After huge declines last week and on Monday, Wirecard shares rallied somewhat on Tuesday. They were up 14.2% in Frankfurt trading at 16.49 euros.

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Stock futures flat following sell-off on Wall Street – CNBC



U.S. stock futures were flat in overnight trading, following weakness in equities in the previous session. 

Dow futures rose 40 points, indicating a gain of 0.16%. The S&P 500 and Nasdaq-100 also were set to open higher, with gains of 0.08% and 0.12%, respectively. 

On Tuesday, the Dow Jones Industrial Average fell 397 points, or 1.5%, breaking a two-day winning streak. The Dow was brought down by a 4.8% drop in Boeing. The S&P 500 also registered a loss, slipping 1.1%, to break a five day win streak. 

The Nasdaq Composite lost 0.86%, after notching its 27th intra-day all-time high of the year earlier in the session on Tuesday. The technology-heavy index was positive for most of the day thanks to strength in Apple, Microsoft, Facebook and Netflix, which all hit record highs. 

“While significant gains in technology stocks kept the market afloat yesterday, even these market darlings capitulated during the afternoon hours today,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. 

Stocks that hinge on the reopening of the economy dragged down the broader market as investors digested a resurgence in coronavirus cases in the U.S. More than 2.93 million coronavirus cases have been confirmed in the U.S. along with at least 130,306 deaths, according to Johns Hopkins University.

“Concerns about rising U.S. Covid case counts continued to shake confidence in reopening efforts about the country,” Paulsen added. 

Sentiment was boosted when the U.S. government awarded drugmaker Novavax a $1.6 billion contract to develop a coronavirus vaccine, the biggest amount yet granted under the White House’s “Operation Warp Speed.”

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North American markets mixed, Nasdaq on track for new record – BNN



4:15 p.m. ET: North American markets fall, close near session lows

North American equity markets closed lower in Tuesday’s trade, erasing much of the gains from Monday’s rally. The S&P/TSX Composite Index fell 0.47 per cent, the S&P 500 dropped 1.08 per cent, the Dow Jones Industrial Average declined 1.51 per cent and the Nasdaq Composite Index shed 0.86 per cent of its value.

The selloff accelerated into the closing hour of trading, after the major North American markets were largely mixed through midday. The declines marked the first negative showing for the S&P 500 in six trading sessions, with the broad-market benchmark snapping its longest winning streak of the year.

U.S. markets were led lower by stocks seen as sensitive to the prospects for a global economic reopening, with airlines, hotel operators and cruise line stocks posting losses. Boeing Co. on its own erased 62 points from the Dow with its 4.77 per cent drop.

In Toronto, nine of the 11 TSX subgroups finished in negative territory, with consumer discretionary, financials and health care posting the largest declines. Only materials and information technology closed the day higher.

160 of the composite’s 221 individual constituents closed out the session lower, with Enerplus Corp. and Seven Generations Energy Ltd. notching the largest percentage declines.

Oil prices retreated modestly, with U.S. benchmark West Texas Intermediate falling 0.74 per cent to US$40.33 per barrel and Alberta’s Western Canadian Select down 0.39 per cent to US$33.08 per barrel.

The Canadian dollar slipped against its American counterpart, falling four-tenths of a cent to 73.48 cents U.S.

12:00 p.m. ET: North American markets mixed, Nasdaq on track for new record

North American equity markets were mixed entering the Tuesday afternoon session, with the S&P/TSX Composite up about 0.2 per cent, the S&P 500 trading essentially flat, the Dow Jones Industrial Average down 0.7 per cent and the tech-heavy Nasdaq Composite Index up half a per cent.

Gains made in technology stocks had the Nasdaq on track to post a new record closing high, as heavyweights including Apple Inc., Facebook Inc. and Microsoft Corp. pushed the index higher.

The underperformance of the Dow was in no small part due to a 3.6 per cent decline in shares of Boeing, which took 46 points off the average on its own. Shares in the U.S. planemaker fell amid broad-based weakness in airline and hotel stocks amid concerns the surging U.S. COVID-19 case count could lead to another clampdown on gradual economic reopenings.

In Toronto, six of the 11 TSX subgroups were in negative territory, led lower by financials, health care and consumer discretionary stocks. Information technology, materials and industrials were the top performers.

Just over half of the composite’s 221 individual constituents were lower, with Enerplus Corp and Air Canada posting the largest percentage declines.

Oil prices pushed modestly higher, with U.S. benchmark West Texas Intermediate rising half a per cent to US$40.83 per barrel. Alberta’s Western Canadian Select gained 0.63 per cent to US$33.42 per barrel.

The Canadian dollar continued to lose ground against its American counterpart, shedding a quarter of a cent to trade at 73.61 cents U.S.

9:40 a.m. ET: North American markets slip, give back some of Monday’s rally

North American equity markets slid in early trading Tuesday, paring some of the gains made in Monday’s rally.

The S&P/TSX Composite Index fell about half a per cent, the S&P 500 declined 0.6 per cent, the Dow Jones Industrial Average dropped 0.75 per cent and the Nasdaq Composite Index slipped a modest 0.3 per cent.

The S&P 500 is on track to snap its five-day string of gains, the longest winning streak for the index since December as investors weigh the impact of global economic reopenings against a surge of new COVID-19 cases in the United States.

Traditional safe-haven assets rose following Monday’s declines, with a measure of the U.S. dollar and U.S. Treasuries both posting modest gains.

In Toronto, all eleven TSX subgroups opened the day in negative territory, led lower by energy, financials and healthcare stocks.

Crude oil gave up ground, with U.S. benchmark West Texas Intermediate down 0.7 per cent to US$40.36 per barrel. Alberta’s Western Canadian Select posted a similar decline, falling 0.66 per cent to US$32.99 per barrel.

The Canadian dollar fell two-tenths of a cent against its American counterpart to 73.64 cents U.S.

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Canadian airlines accused of ignoring COVID-19 precautions, denying refunds – CTV News



When Bobbi Jo Green booked a flight back in May for her, her husband, and her children to see two ailing family members, she was counting on the airline’s physical distancing rules to still be in place.

But just three weeks before Green and her family were set to fly from Edmonton to Sydney, N.S., on July 17, WestJet announced it was ending its policy of leaving the middle seats on its flights empty.

“I was devastated,” Green said, noting her family spends every summer in Nova Scotia with her 93-year-old grandmother who is suffering from severe dementia and another family member with an incurable form of cancer.

“We all knew it could very well be the last summer we would spend with them.”

When Green called WestJet to see if any accommodations could be made, she told the company she has a heart condition that puts her in the high-risk category for COVID-19.

Despite her pleas, Green said the airline told her it was unable to make any special accommodations, nor would it allow her to change the date of the flight to before July 1, when the rules were relaxed, without paying a fee.

And Green’s not alone: as provinces begin to relax domestic travel restrictions, the cessation of physical distancing rules by two of Canada’s biggest airlines — WestJet and Air Canada — is causing frustration and grief among some passengers.

Gabor Lukacs, head of the advocacy group Air Passenger Rights Canada, said he has fielded countless complaints from passengers during the COVID-19 pandemic, many of which are related to the same issues: airlines refusing to offer refunds or accommodations amid the abolition of physical distancing rules.

While he acknowledges the effort to fill seats is due to airlines attempting to recoup billions in lost revenue, Lukacs argues the companies risk deterring customers from flying at all.

“The question is: do we allow economic considerations to override public health? We don’t allow supermarkets to sell spoiled meat because it’s cheaper. Are we going to allow doctors to skip disinfecting their tools to save the cost?”

There’s some evidence he’s right: a new poll conducted by Leger and the Association of Canadian Studies found 72 per cent of respondents say they are not comfortable flying now that Air Canada and WestJet have culled their seat distancing policies.

Only 22 per cent said they would be OK with flying under the newly relaxed rules.

In response to criticisms, WestJet forwarded The Canadian Press a statement from a July 3 blog post regarding changes to its seat distancing policy.

“The blocked middle seat was introduced at the beginning of the pandemic before the myriad of safety measures were put in place and mandated on board,” the statement reads.

“Seat distancing was never intended to be in place permanently or throughout the pandemic.”

The post notes a number of measures WestJet has taken to help stop the spread of COVID-19 on its flights, including mandatory masking, pre-boarding questionnaires for all passengers, temperature screening, thorough cleaning of aircraft between flights, and the restriction of in-flight dining services.

As of Tuesday afternoon, Air Canada did not respond to a request for comment.

However, the company has also denied it’s putting passengers and staff at risk by filling flights up, pointing to other safety measures as mitigating the risk of spreading COVID-19.

Yet some passengers report first-hand experiences in which masking protocols were not followed.

Maureen Isabel Green, 31, flew from Vancouver to Fredericton three weeks ago with Air Canada to visit her family, and said she was shocked by the lax use of masks by both airport employees and the passengers on her two connecting flights.

“I just think of all the people who are getting on a flight and risking their life, or risking the life of the people they’re going to visit, because some people don’t want to wear a mask for a few hours,” she said.

Green, who is a health-care worker, said there were numerous instances on her flight from Vancouver to Montreal where a group of young, male passengers took off their masks when flight attendants were not present.

While at the Montreal airport, Green said a man was able to board a flight without wearing a mask, simply by telling attendants he had a medical condition that prevented him from doing so.

Air travel has been at the centre of several headline-grabbing incidents throughout the pandemic — particularly since travel restrictions have been eased in some regions.

On July 2, health authorities in B.C. warned the passengers of four separate flights that they may have been exposed to COVID-19.

Just a day before — on the exact day the airlines ended their social distancing policies — the Nova Scotia Health Authority warned passengers of a Toronto-to-Halifax WestJet flight from the previous week that they may have been exposed to COVID-19.

And on Sunday, a Halifax man reportedly walked off of a St. John’s-bound flight after learning he was the only passenger travelling within the so-called “Atlantic bubble,” sparking discussion about the effectiveness of airlines’ COVID-prevention policies.

This report by The Canadian Press was first published on July 7, 2020.

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