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Union Investment scandal: The German subsidiary Volks- und Raiffeisenbanken has released one of its top fund managers with immediate effect because he is said to have become heavily enriched by stock transactions over a longer period of time. The manager, whose name is known as SPIEGEL, was regarded by professional investors in Germany as one of the biggest supporters of the now insolvent financial services provider Wirecard. It is not clear if he has also enriched himself with shares of Wirecard. A company spokesperson confirmed that the prosecutor had registered his workplace at Union Investment headquarters. At first, the prosecutor and attorney for the released employee could not be located.
As Union Investment also reported to SPIEGEL, the employee is said to have “engaged in the prohibited use of inside information in private custodial accounts outside of company systems for a few months and thus illegally enriched himself to a considerable extent “. It said it had “abused business knowledge to engage in insider trading in private custodial accounts beyond Union investment systems.” The necessary documents and data have been provided to the prosecution. Neither Union Investment clients nor special assets were harmed. The investigations, according to Union Investment, showed “that the security systems in the plaza, the custodian banks, the Bafin financial supervisory authorities, the investigating authorities, the investment companies are functioning and have come into effect.”
Too good for a clerical job
According to information from SPIEGEL, the wealthy family man was internally a star. The performance of his funds was so outstanding that the man could not join the management team; it was too important to Union funds for that. Now the race has come to an abrupt halt.
Union Investment, like many German fund companies, and at the insistence of the now-released employee, invested huge amounts in Wirecard stock last year. According to a summary in the newsletter finanz-szene.de, Union Investment increased the number of Wirecard shares in 14 retail funds from nearly 500,000 to 2.7 million between March and September 2019. In January 2020, Union was one of Wirecard’s largest shareholders with more than three percent.
