German top court finds Cum-Ex trading illegal | DW News

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Germany’s top court has upheld fines amounting to millions of euros against a bank and two London share traders for tax fraud. The Federal Court of Justice was ruling on an appeal against the fine issued by a district court in March 2020.

The district court had issued a fine of around €14 million ($16.5 million) for one of the traders and ordered the private German bank MM Warburg to pay back around €176 million. The sentence also included suspended jail time.

The “cum-ex” case was the result of traders using a loophole to trick governments and receive millions in tax repayments for taxes they had never paid. The cases involved banks and stockbrokers trading shares with (“cum”) and without (“ex”) dividend rights, with the aim of being able to conceal the identity of the actual owner and allow both parties to claim tax rebates on capital gains taxes. They employed multi-billion-euro trades to file bogus tax reclaims and scam the state between 2005 and 2011. They particularly profited in the wake of the 2008/2009 financial crash. The defendants claimed they were merely taking advantage of a loophole.

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