Disclaimer: This report concerns individuals in positions of public trust and activities related to their official duties. By definition, senior officials of regulatory bodies are public figures and must be open to public scrutiny and criticism.
EU Regulators Under Fire
It has been a turbulent week for European regulators—particularly Germany’s BaFin and Malta’s MFSA.
In Germany, BaFin President Felix Hufeld and Vice President Elisabeth Roegele were forced to resign in the wake of the Wirecard scandal. German Finance Minister Olaf Scholz has stated his intention to make a fresh start at the regulator.
In Malta, former MFSA CEO Joe Cuschieri and the Authority’s General Counsel Edwina Licari have been caught up in compliance controversies. The pair accepted an invitation to Las Vegas from businessman Yorgen Fenech—allegedly the mastermind behind the murder of investigative journalist Daphne Caruana Galizia and suspected of bribing members of the former Maltese government (Wikipedia).
The Wirecard Fallout
The Wirecard affair also claimed the resignation of Ralf Bose, head of Germany’s auditor watchdog APAS. Like several BaFin employees, Bose was found to have traded Wirecard shares while his agency was investigating the company.
APAS oversees Germany’s auditors, and in the Wirecard case, EY auditors had signed off on the company’s financial statements for years despite growing suspicions. Critics say both BaFin and EY failed to investigate thoroughly.
MFSA’s Ongoing Scandal
In Malta, the repercussions for Joe Cuschieri and Edwina Licari are still unfolding. Cuschieri resigned voluntarily, while Licari remains in her position (according to her official MFSA profile).
Cuschieri’s prior role as head of the Malta Gaming Authority (MGA)—which oversaw Fenech’s gambling operations—adds further weight to the controversy. Local sources say more revelations and political consequences are likely.
A Crisis of Regulatory Ethics
The BaFin and MFSA scandals reveal serious ethical shortcomings at the heart of European financial supervision. They also highlight the tangible consequences of compliance failures: when oversight collapses, large-scale fraud can flourish.
Comparable Failures: Wirecard and Paytah
Like Wirecard, Paytah—the brand name of MFSA-regulated Phoenix Payments Ltd—has been linked to facilitating fraudulent broker operations that defrauded hundreds, if not thousands, of EU consumers.
Although the case has been flagged to the MFSA, no concrete steps have been taken to assist victims in recovering their funds.
Sources: Financial Times, Reuters, Bloomberg, Scam-Or Project Research