Status: 22/06/2022 11:32
The securities specialists of the Sparkassen-Finanzgruppe have their own office of the public prosecutor. Investigators search DekaBank offices in Frankfurt and private apartments for cum-ex transactions.
The offices of DekaBank in Frankfurt have been raided since yesterday as part of the investigation into the stock deals around the date of the dividend. Current and former council members are said to be among the accused.
DekaBank confirms the research
Confirmed Björn Korschinowski, Head of Corporate Communications of Deka Bank tagesschau.dethat authorities have been raiding the Frankfurt office in connection with cum-ex transactions since yesterday. Deka Bank is cooperating fully with the prosecutor. The raid is still ongoing.
The public prosecutor in Cologne had previously stated that since Tuesday they were carrying out search warrants against a bank in Frankfurt and against an accounting firm in a cum-ex proceeding. He didn’t mention names. In addition, the private homes of eight suspects were also searched. About 110 officers are on duty.
“Commitment to ethical conduct”
According to informed circles, DekaBank would have commissioned an external expert for cum-ex transactions some time ago. The securities house of the German Sparkassen-Finanzgruppe says it is committed to “ethically correct behavior”.
The internal code of ethics is “the basis of the corporate culture of the Deka Group and guarantees that we always act in compliance with the law, in an open and transparent way and that we are guided by added value”, according to the bank’s promise.
DekaBank had to cancel over 50 million euros
DekaBank was one of the first banks ever to publicly acknowledge its involvement in the cum-ex scandal. In February 2016, the institute went bankrupt before the Hessian Court of Finance with a € 53 million lawsuit.
Securities brokerage firm Sparkassen-Finanzgruppe claimed the capital gains tax from cum-ex agreements it established in 2010. DekaBank accepted the ruling after a two-month period and did not appeal to the Federal Finance Court. The withdrawal caused disappointment in the industry at the time and other banks had also hoped for a historic ruling.
Foreign banks are also being targeted
Because DekaBank is by no means the only bank involved in the Cum-Ex scandal. The Cologne public prosecutor’s office is investigating around 1,500 people in the financial sector due to questionable stock deals around the dividend date.
More recently, investigators had also increased pressure on international banks and, among other things, raided the offices of British Barclays and Bank of America Merrill Lynch.
How do cum-ex offers work?
In cum-ex trading, shares are traded by different participants around the dividend record date, ie shares with (Latin: “cum”) and without (“ex”) right to the dividend.
Due to this confusion, it was often not clear to the tax authorities who was entitled to a tax refund for the automatically deducted capital gains tax. In the end, investors only had the capital gains tax paid once repaid multiple times – and thus they defrauded the German state and taxpayers.
The biggest tax scandal to date
A year ago, in July 2021, the Federal Court of Justice (BGH) ruled: Cum-Ex transactions are illegal and constitute criminal tax evasion. This makes the Cum-Ex scandal the largest German tax scandal to date.
From 2001 to 2016 bankers, lawyers and investors robbed the German state of billions with fiscal expedients linked to the payment of dividends: at least 10 billion euros through the classic cum-ex business and at least more with the related and subsequently executed cum-cum companies 28 billion euros.
Cum-cum offers are similar to cum-ex offers. But it is about circumventing the tax rules for foreign owners of German shares. Cum-cum agreements have been banned in Germany since 2016 and cum-ex agreements since 2012. Worldwide, the damage caused by the cum-ex and cum-cum agreements by banks and investors amounts to at least € 150 billion .