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Germany's Bafin bans Wirecard short positions, cites negative reports

Wirecard's logo can be seen on a smartphone held in front of a stock market chart.
Alexander Pohl | NurPhoto | Getty Images

Germany's financial watchdog Bafin on Monday issued a ban against establishing or increasing short positions in Wirecard AG stock, citing market uncertainties due to the German payments company's weak share performance.

"There is a risk that an impact exerted on the share price of Wirecard AG as a result of net short positions being entered into or existing net short positions being increased will cause excessive price movements in the share price of Wirecard AG, given this company's importance for the economy," Bafin added.

"Short attacks" followed and facilitated by negative reporting in the media had targeted the company between 2008 and 2016, Bafin said, adding, "through which short-sellers profited from entering into certain positions, resulting in corresponding decreases in the share price of Wirecard AG."

Following a series of investigative reports in the Financial Times alleging fraud and creative accounting, a constituent of Germany's blue-chip DAX index shed $10 billion in value since the Financial Times ran the first of a series of three investigative reports at the end of January.