Book Review: “Money Men” – Dan Mccrum

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Money Men

Q1 2022 hedge fund letters, conferences and more

The Wirecard scandal has resulted in a couple of books already, most of them quite good. But the ultimate book is of course the one from FT reporter/investigator Dan McCrum who dedicated more or less 7 years of his career to this and significantly contributed to the ultimate revelation of this “House of Cards”.

As a journalist, McCrum knows how to write and in contrast to some other books from journalists, this actually reads like a book and not a series of articles.

Compared to other Wirecard Books, “Money Men” includes a lot of interesting details on the FT / UK side of things plus some outright hilarious details about the Wirecard Management. He tells the story of a company with roots in semi-legal “high risk” areas (porn and gambling) that started to fudge accounts quite early on and moved aggressively against anyone who dared to criticize.

There are a couple of highlights, for instance the “on site” visit with the auditors to verify Philippine Bank accounts, the trips of McCrum and other FT colleagues to check out subsidiaries of Wirecard and the deal where Marsalek and Co bough an Indian company for 30 mn EUR and sold that 4 weeks later for over 300 mn EUR to Wirecard.

Some observations take-aways:

  • Overall, the Wirecard guys were not super mastermind criminals but rather a group of thugs who successfully sailed the wave of payments for quite some time
  • For the early years, the book contains some inaccuracies. For instance McCrum mentions that in the 2008 episode, German Hedge fund manager Bosler did the original research and passed it on to SdK member Straub but in reality Straub copied&pasted the research from an online stock forum (and partly from my posts back then).
  • Clearly, the universe of short sellers seems to contain also a certain amount of “sleaziness”. McCrum for instance doesn’t think very highly about Fraser Perring and on the UK side, some of the contacts of the FT team were clearly “shadow figures”. I think that was also the reason why Wirecard’s initial counter attack on the FT was quite efficient, because the FT team indeed had a lot of contacts with questionable people.
  • McCrum mentions that on the UK side people were surprised that something like this could happen in “correct” Germany. In reality, Germany is quite a fertile ground for all kind of stock scams and this was just the largest one. Financial oversight and regulation in Germany clearly also played a role but based on my own experience, German regulation is not better or worse than in other countries.
  • For investors who ultimately lost money in this, there were many signs since the Zatarra report in 2016 and the following reporting from the FT, that something was not kosher. Blaming regulators or auditors for one’s losses is the sure way to make the same mistakes again in the future.

Overall, I can highly recommend the book, even if one has read others about Wirecard already.

Article by Value and Opportunity.

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