On 3rd September, Deutsche Welle reported on the opening of a criminal trial involving 2 British investment bankers, who stand accused of helping engineer dubious transactions resulting in massive tax losses.  Reporters have called the trial and scandal “the biggest financial fraud trial” and “the most complicated” tax case trial in modern German history.  Asking if the process involved was a legal loophole or fraud, the news site explains that cum-ex trades are equity deals where investors rely on the sale of borrowed shares right before a given firm was slated to pay dividends.  To put it differently, it says, shortly before the dividend pay-out day, shares with (“cum”) and without (“ex”) dividend rights were quickly traded among various market players, resulting in double tax reclaims for share traders — reclaims that authorities now call illegitimate.  The role of Germany’s biggest lender Deutsche Bank in the deals will also be scrutinised, as it was involved in financing clients’ cum-ex transactions alongside many other lenders such as Sweden’s SEB AB, Barclays Plc. and M.M. Warburg & Co.

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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