British hedge fund titan Crispin Odey, who has bet that shares of beleaguered fintech Wirecard AG will plummet further, is now training his sights on Germany’s financial regulator after it took the unprecedented step of banning short sales on the payments company.
The move by BaFin, prohibiting investors from taking new short positions or increasing existing ones through April 18, opens the watchdog to potential litigation, Odey said in an interview Monday. Such a step would require the regulator to be sure that Wirecard’s employees haven’t engaged in any wrongdoing as alleged by the Financial Times in recent weeks, he said.
Odey said he’s now more excited about taking BaFin to court than his wagers on the Aschheim, Bavaria-based company. Wirecard shares have whipsawed over the last month after a series of reports in the Financial Times alleging fraud at the payment company’s Singapore unit. The firm has denied wrongdoing. BaFin, which had banned naked short sales on 11 firms during the global financial crisis, said it opted to ban such bets on a single company because the recent price volatility risks undermining the broader stock market.
“It’s a very dangerous thing that they have chosen to do over the weekend,” Odey said. “We are very excited about what we might be able to make in litigation against BaFin.”
For more on Odey’s bets against Wirecard, see this
A spokeswoman for BaFin declined to comment.
The London-based hedge fund manager, who is known for his bearish bets and vocal criticism of companies and central banks, disclosed a short against the company on Jan. 30. Since then, his firm has raised its bet to 0.8 percent of the company’s shares.
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