Raids over cum-ex transactions: Investigators search through banking association offices

The banking association is targeted by the authorities because of the cum-ex tax scandal. Prosecutors and tax investigators search the offices in Berlin and Frankfurt. Who the investigations are directed against is so far unclear.

The police searched offices of the banking association in Berlin and Frankfurt in connection with so-called cum-ex proceedings. An association spokesman said. "The proceedings are not directed against those responsible or employees," said the responsible public prosecutor in Cologne. "The search should serve to find evidence that can be of importance for the continuation of the investigation and the further clarification of the complex facts." The association announced that it would cooperate fully.

According to a report by the "Süddeutscher Zeitung", NDR and WDR, it is suspected that suspects via the banking association have tried to influence Cum-Ex legislation. The aim was therefore to maintain loopholes in order to continue the business.

In "cum-ex" transactions, investors used a loophole in the law to cheat the state for money for years. Around the dividend date, shares with ("cum") and without ("ex") dividend entitlement were moved back and forth between several parties. In the end, the tax authorities no longer knew who the papers belonged to. Tax authorities reimbursed capital gains taxes that had not been paid at all. The state suffered a billion dollar damage. The tax loophole was closed in 2012.

However, the authorities did not find out about the tax tricks until late. The first suspicions had occurred years earlier. At the end of 1999, the financial regulator received anonymous information that may have described such transactions. The attempt to put a stop to it with the 2007 annual tax law failed. Here too, gaps in the law were warned early. A parliamentary committee of inquiry had later tried to clarify the influence of the banking association in drafting such laws. It is unclear whether the public prosecutor's searches are also related to this.

"The Cum-Ex committee of inquiry was then refused important lobbying documents," said deputy leader of the Left in the Bundestag, Fabio de Masi. "Now, thanks to courageous judges, there is a chance to gain insight."