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Slate Money podcast was surprisingly good on Wirecard this week. Three things popped out - that this had been widely claimed as a fraud (millions in business g

Slate Money podcast was surprisingly good on Wirecard this week. Three things popped out - that this had been widely claimed as a fraud (millions in business going through offices that were just postal drops etc) but the German "establishment" supported them because they had no native german payment processor otherwise (and once you were in the Dax 30 it's a big deal to declare fraud). Also the failings of shorting a business - it's not enough to know they will collapse sometime, but you cannot keep covering your short for five years without wondering if the bet is worth it. But really this is just yet another example of regulatory failure and it's hard to see how we fix it without destroying the culture of entrepreneurship

barney54 6y ago
The regulators need to do a real investigation and not attack shorts and journalists. It's not easy to do real investigations, but not attacking investors and journalists is not hard.
ChuckNorris89 6y ago
How does investigating fraud destroy entrepreneurship culture? Should we just turn a blind eye to every dodgy business practice to ensure some entrepreneur gets rich? Oh, wait...
- mratsim 6y ago
  At this point, if a company raised an SIO (Softbank Initial Offering) and starts with a W like WeWork and Wirecard, I'm going to look into it at least a hundred times or avoid it like the plague.
hef19898 6y ago
Agree, with the exception of the last paragraph. SOX didn't kill NASDAQ or the Dow. And if an entrepreneur is only successful because regulations are lax, not enforced and his business is ignoring corporate governance, that business doesn't seem to have any justification to exist in the first place.
- lifeisstillgood 6y ago
  Wow. I have really bought into a line sold to me subconsciously haven't I. Yeah. Let's have proper regulation and policing.
- gwright 6y ago
  Your comment reads as if regulations are some binary thing, the nature of regulation is critical to any meaningful discussion. Regulations can be reasonable guards against harm (fraud, pollution, safety, etc.) and they can also be part of a defensive moat that protects existing businesses via otherwise unjustified restrictions and imposes a "tax" on economic activity that hurts everyone. SOX isn't the be-all-and-end-all of financial regulations and my understanding is that there is considerable regulatory nonsense inside SOX. Doesn't mean that there aren't good parts just that that the details do matter.
orhmeh09 6y ago
What’s a good thing that the culture of entrepreneurship has brought? If you were to “destroy” that culture, would it be impossible to achieve otherwise?
- chrisco255 6y ago
  Electricity, the light bulb, the automobile, the washing machine, the air conditioner, the personal computer, etc etc. I really can't tell if this is a troll question or not. Clearly there was nothing stopping humanity from discovering these things 1000 years ago. What changed? A culture that balances capital and risk call achieve extraordinary things. There is no substitute for it.
  - Barrin92 6y ago
    everything you just named had little to do with what is today called "entrepeneurship" and more to do with either rigorous corporate scientific activity (the automobile), solitary tinkering (the lightbulb, early advances in software) or was simply the byproduct of genuinely, informal scientific pursuit. None of those inventions were made because of VC hypecycles, or two billion in bogus bank accounts, or marketing and customer aqcuisition. In fact everything you named predates the era of high risk venture capital. It wasn't primarily a culture of entrepreneurship but a culture of tinkering and invention that got us those fundamental technologies.
    - cnasc 6y ago
      I’m not sure why you’re conflating entrepreneurship with Silicon Valley-style VC.
      - Barrin92 6y ago
        because we're in the comment chain about wirecard and their behaviour is the result of that sort of culture. It's also still, despite the immense criticism touted around the world as something to emulate. You see billions of cash pumped into say, 'incubators' in Paris and other large cities around the globe with for the most part no results.
an_opabinia 6y ago
All it would have taken, all these years, is a single phone call to a Philippines bank, apparently. Cmon, people didn’t want to know. It’s not a regulatory failure. There were shareholders selling into the fraud, for a decade. Are they culpable? The Bernie Madoff beneficiaries were. There’s going to be an incredible amount of pain for many, many parties. The reality is 9 out of 10 people on this forum would be happy selling Wirecard stock at “the right time.”

barney54 6y ago

The regulators need to do a real investigation and not attack shorts and journalists. It's not easy to do real investigations, but not attacking investors and journalists is not hard.

ChuckNorris89 6y ago

How does investigating fraud destroy entrepreneurship culture? Should we just turn a blind eye to every dodgy business practice to ensure some entrepreneur gets rich? Oh, wait...

mratsim 6y ago
At this point, if a company raised an SIO (Softbank Initial Offering) and starts with a W like WeWork and Wirecard, I'm going to look into it at least a hundred times or avoid it like the plague.

hef19898 6y ago

Agree, with the exception of the last paragraph. SOX didn't kill NASDAQ or the Dow. And if an entrepreneur is only successful because regulations are lax, not enforced and his business is ignoring corporate governance, that business doesn't seem to have any justification to exist in the first place.

lifeisstillgood 6y ago
Wow. I have really bought into a line sold to me subconsciously haven't I. Yeah. Let's have proper regulation and policing.
gwright 6y ago
Your comment reads as if regulations are some binary thing, the nature of regulation is critical to any meaningful discussion. Regulations can be reasonable guards against harm (fraud, pollution, safety, etc.) and they can also be part of a defensive moat that protects existing businesses via otherwise unjustified restrictions and imposes a "tax" on economic activity that hurts everyone. SOX isn't the be-all-and-end-all of financial regulations and my understanding is that there is considerable regulatory nonsense inside SOX. Doesn't mean that there aren't good parts just that that the details do matter.

orhmeh09 6y ago

What’s a good thing that the culture of entrepreneurship has brought? If you were to “destroy” that culture, would it be impossible to achieve otherwise?

chrisco255 6y ago
Electricity, the light bulb, the automobile, the washing machine, the air conditioner, the personal computer, etc etc. I really can't tell if this is a troll question or not. Clearly there was nothing stopping humanity from discovering these things 1000 years ago. What changed? A culture that balances capital and risk call achieve extraordinary things. There is no substitute for it.
- Barrin92 6y ago
  everything you just named had little to do with what is today called "entrepeneurship" and more to do with either rigorous corporate scientific activity (the automobile), solitary tinkering (the lightbulb, early advances in software) or was simply the byproduct of genuinely, informal scientific pursuit. None of those inventions were made because of VC hypecycles, or two billion in bogus bank accounts, or marketing and customer aqcuisition. In fact everything you named predates the era of high risk venture capital. It wasn't primarily a culture of entrepreneurship but a culture of tinkering and invention that got us those fundamental technologies.
  - cnasc 6y ago
    I’m not sure why you’re conflating entrepreneurship with Silicon Valley-style VC.
    - Barrin92 6y ago
      because we're in the comment chain about wirecard and their behaviour is the result of that sort of culture. It's also still, despite the immense criticism touted around the world as something to emulate. You see billions of cash pumped into say, 'incubators' in Paris and other large cities around the globe with for the most part no results.

an_opabinia 6y ago

All it would have taken, all these years, is a single phone call to a Philippines bank, apparently. Cmon, people didn’t want to know. It’s not a regulatory failure. There were shareholders selling into the fraud, for a decade. Are they culpable? The Bernie Madoff beneficiaries were. There’s going to be an incredible amount of pain for many, many parties. The reality is 9 out of 10 people on this forum would be happy selling Wirecard stock at “the right time.”