The chief of the German financial regulator leaves after Wirecard

FRANKFURT (Reuters) – Felix Hufeld will step down as head of German financial watchdog BaFin after coming under pressure for failing to spot wrongdoing before the collapse of payments firm Wirecard.

“The Wirecard scandal has revealed that Germany’s financial supervision needs a reorganization,” the finance ministry said in a statement.

The acknowledgment of the problems was a new indictment of Germany’s oversight of a company that started out processing payments for gambling and pornography before becoming a “fintech” – financial technology star. – and finally the biggest fraud case in Germany.

The finance ministry said the decision to replace Hufeld was mutual and preceded the results of a ministerial review of a restructuring of the agency to be presented next week.

Calls for Hufeld’s resignation came to a head on Thursday after BaFin reported one of its employees to state prosecutors on suspicion of Wirecard-related insider trading, shortly before the company shut down .

Hufeld said in the ministry statement that BaFin has grown in importance and relevance during his six years as chairman. “Now there are other tasks to be done,” he said, wishing his successor the best.

In a separate statement, Bafin said that the executive director of its securities oversight, Elisabeth Roegele, would also resign by mutual agreement to make way for new management.

BaFin declined to comment further.

Olaf Scholz, the German finance minister, has also been criticized for being responsible for BaFin.

Fabio de Masi, a German lawmaker taking part in a parliamentary inquiry into Wirecard, said Hufeld’s departure was “long overdue”.

“We cannot explain why Mr Scholz waited weeks and months to make this decision,” said de Masi.

Hufeld is expected to remain at the helm until March 31 to ensure an orderly transfer to the new leadership, said two people with knowledge of the matter.

Allegations of fraud at Wirecard had been swirling for years, although BaFin and German prosecutors had long focused their investigations on investors and journalists who had uncovered irregularities.

As the company prepared to collapse, BaFin staff bought and sold its shares in ever higher volumes.