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Berlin (AFP) – German and European financial market watchdogs ordered Monday a ban on short-selling shares in payment processing firm Wirecard, sending the stock price soaring after a weeks-long rollercoaster ride over fraud allegations.

In Bonn, market supervisor Bafin said in a statement that it issued a decree “forbidding the establishment of new net short-selling positions in Wirecard AG shares or to increase existing net short-selling positions” for two months.

Short-sellers borrow shares, sell them on the market and later buy them back. If the price of the shares has fallen, the difference in price is profit for the short-seller, making the practice in essence a bet on falling stock prices.

In a separate statement, the European Securities and Markets Authority (ESMA) said it “issued an official opinion agreeing to an emergency short-selling prohibition” on Wirecard shares.

The Munich-based firm’s stock market woes “are adverse events or developments which constitute a serious threat to market confidence in Germany,” the authority said, making the ban an “appropriate and proportionate” response.

Financial wunderkind Wirecard’s troubles over the past three weeks are all traceable back to allegations of fraud in its Singapore office.

A series of investigative articles in the Financial Times (FT) alleged accounting trickery to pad the books in the firm’s Asian operations.

Wirecard has called the allegations “defamatory” and said it plans legal action against the British newspaper.

Meanwhile Bafin and Munich prosecutors have launched investigations into market manipulation in relation to the reports.

It is far from the first time Wirecard — a puzzle to many investors thanks to its complex business model — has been subject to attacks by short-sellers, with previous episodes in 2008 and 2014 also linked to fraud allegations.

The firm was launched in 1999 as a processor for electronic payments, at a time when major banks were ignoring the field and the embryonic financial technology or “fintech” scene.

Wirecard’s star rose as online retail took off, with one major revenue stream from guaranteeing payments for corporate clients like airlines or online pharmacies.

Late last year, Wirecard elbowed Germany’s second-biggest lender Commerzbank out of the prestigious DAX index.

In Frankfurt trading, shares in the group had jumped 13 percent around 10:20 am (0920 GMT) to trade at 112.90 euros ($127.66), against a market down 0.3 percent.

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