The tax authorities submitted their audit report to the company in November.
(Photo: Reuters)
Frankfurt The German financial supervisory authority is targeting Flatexdegiro more: The Bafin is using a special auditor at the Frankfurt online broker, as the authority announced on Friday.
The measure goes back to a special test from last year. The Bafin found serious deficiencies “in the internal control system, in the supervisory reporting system and in the prevention of money laundering” at Flatexdegiro Bank, a wholly owned subsidiary of Flatexdegiro.
Now the company must take action to eliminate the deficiencies and establish a proper business organization. The special representative will monitor the implementation of the measures in the future.
“The test itself is complete,” said a Flatexdegiro spokesman. The company is currently in the process of designing and implementing initial measures to remedy the defects, the spokesman continued. “We find it extremely helpful that the Bafin has appointed a special representative for this purpose, in order to ensure close monitoring of the projects right from the start,” it continues. The special auditor comes from the auditing company Mazar.
The shares of the SDax company came under strong pressure on Friday due to the news: by midday, the papers were temporarily down by up to eight percent.
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Flatexdegiro had already admitted at the beginning of December last year that the Bafin had found deficiencies during a special audit. Flatex took over Dutch competitor Degiro in 2019 and has grown rapidly since then. At the end of September 2022, the online broker managed 2.4 million customer accounts and over 40 billion euros in assets.
Due to the growth, the supervisory authority no longer considers Flatexdegiro to be a “small and non-complex” institution, the company said at the time. This leads to increased regulatory requirements for the group, accompanied by a generally higher level of supervision.
Flatexdegiro then announced the first changes in the board of directors. Among other things, CFO Muhamad Chahrour handed over his post to Benen Janos, who had previously held the same position at Flatexdegiro Bank. Since then, Chahrour has been the new deputy to CEO Frank Niehage.
The SDax company had already announced at the end of October that Matthias Heinrich was replacing the previous Chief Risk Officer at Flatexdegiro Bank, Jörn Engelmann.
Fine of 1.05 million euros
In addition, the Bafin also imposed a fine of 1.05 million euros on the online broker because the company had violated “bank regulatory provisions”, as the financial supervisory authority also announced. Specifically, according to the company, it is about reporting violations in reporting to the supervisory authorities from the years 2020 and 2021.
The online broker wants to present its business figures for the past year on Monday. Flatexdegiro has had to correct its forecast downwards several times in recent months.
more on the subject: Bafin sees shortcomings at Flatexdegiro – online broker lowers business forecast again