Cum-ex business – bankers sentenced to long prison terms

With cum-ex deals, bankers have evaded taxes on stock deals for years, the state escaped billions. In Bonn, a verdict has now been passed against an ex-employee of the Hamburg Warburg Bank.

The Bonn Regional Court has sentenced an ex-employee of the Hamburg private bank MM Warburg to imprisonment for so-called cum-ex transactions. The chamber had sentenced the defendant to five years and six months for tax evasion in five cases, a spokeswoman for the court said on Tuesday.

However, given the length of the proceedings, two months of the sentence have already been carried out, she added. The proceedings had started on November 17, 2020, according to the spokeswoman, the judgment was made on the 29th day of the hearing. The Warburg Group declared that the Bonn judgment would have no economic consequences for them.

Cum Ex: This is how tax fraud worked

Several proceedings in connection with the Cum-Ex scandal are ongoing at the Bonn Regional Court, and investigations are being pooled at the Cologne Public Prosecutor’s Office. The court last admitted the indictment against a former employee of a Swiss private bank in May.

The German state suffered billions in damage in the cum-ex deals. Investors 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.

The cases had spread widely, so banks and law firms are constantly being searched. In the first major criminal case nationwide, the court in Bonn imposed suspended sentences against two British stock traders in March 2020.


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