Against criminal liability at Cum-Ex: Warburg Bank takes precedence over the Constitutional Court

Against criminal liability with Cum-Ex
Warburg Bank takes precedence over the Constitutional Court

In July, the Federal Court of Justice made a clear statement on cum-ex deals: They are punishable – the illegally generated profits must be repaid. That was not a fair trial, say the owners of the Hamburg bank involved in the affair – and are lodging a constitutional complaint.

Warburg Bank, involved in the Cum-Ex affair, and its owners Max Warburg and Christian Olearius have lodged a constitutional complaint against a ruling by the Federal Court of Justice (BGH). In the judgment pronounced at the end of July, the BGH had confirmed a ruling by the Bonn Regional Court against two ex-stock exchange traders from London and thus for the first time established the criminality of so-called cum-ex transactions by the highest court.

Warburg and Olearius were violated in their rights guaranteed by the European Convention on Human Rights, said lawyer Peter Gauweiler before the parliamentary committee of inquiry of the Hamburg citizenship. Therefore, a complaint has been submitted to the Federal Constitutional Court. In the judgment, the bank owners had been denied the basic right to a fair trial and the presumption of innocence, as it contained “final determinations on Olearius’ alleged criminal liability”, without this having previously been established in a constitutional process, said Gauweiler.

The BGH had ruled that the tax evasion offense had been met in cum-ex transactions, and also confirmed that Warburg Bank had to repay more than 176 million euros. The Hamburg bank had in the meantime already settled the claims without an admission of guilt, as the bank had always emphasized.

She had also announced that she would continue to take action against the tax assessments. In their complaint to the Federal Constitutional Court, the bank and its owners are now demanding the annulment of the BGH judgment and referral back to the Federal Court of Justice, said Gauweiler.

The German state suffered billions in damage in the cum-ex deals. Investors can have a capital gains tax paid once on stock dividends reimbursed several times with the help of banks. To do this, they moved shares with – that is, cum – and without – ex – dividend entitlement to one another around the cut-off date of the dividend payment.

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