For years, banks and investors have been bilking the state out of billions with opaque stock deals. Now another Cum-Ex verdict is expected. For the first time it is about the role of the consultants.
In the billion-dollar tax scandal surrounding cum-ex share transactions, a verdict is expected today at the Frankfurt Regional Court against a former top lawyer at the major law firm Freshfields Bruckhaus Deringer.
As an advisor to the Maple Bank, which later went bankrupt, he is said to have made it possible for years to deceive the tax authorities with the stock deals using “courtesy reports”. He is accused of aiding and abetting serious tax evasion. The trial is, for the first time, about the criminal liability of a tax advisor at a major law firm in the complex of cum-ex stock deals.
Conviction is considered probable
The presiding judge at the Frankfurt Regional Court, Werner Gröschel, spoke in December of a “high probability of conviction” for the defendant, who later confessed. The Frankfurt Public Prosecutor’s Office has demanded a prison sentence of five years and six months for the man.
She accuses the ex-top lawyer of trying to dispel initial concerns from Maple bankers and also making false statements to the tax authorities.
What are Cum-Ex Deals?
In cum-ex stock transactions, investors had the capital gains taxes paid on dividends reimbursed several times by the state. The deals, which peaked between 2006 and 2011, cost the tax authorities at least ten billion euros.
The loophole was only closed in 2012. For a long time it was unclear whether cum-ex deals were illegal. In 2021, the Federal Court of Justice (BGH) decided that cum-ex transactions should be viewed as tax evasion.
The role of Maple Bank
The ex-top lawyer had advised Maple Bank on cum-ex transactions. The institute ran the deals on a large scale and, according to the indictment, caused tax damage of a good 388 million euros. The financial regulator closed the bank in 2016 because there was a risk of over-indebtedness due to a tax provision for Cum-Ex.
An ex-Maple banker is also standing before the Frankfurt regional court on charges of serious tax evasion. The public prosecutor’s office demanded a suspended sentence of two years for him. The man had already made a confession at the start of the trial.
Source: Stern
