As of: December 8th, 2021 8:09 am
The Stuttgart business lawyer Eckart Seith collected information about the CumEx scam from banks. In Switzerland he is on trial again for industrial espionage.
As a business lawyer, Eckart Seith has prepared countless court appointments. But the current process is not just another file number. This time he is in the dock himself: “I have put 450 hours of work into the preparation. I face a sentence with a prison sentence. Since then, he has stood as a defendant before the Zurich Higher Court in the second instance. Again he has to face the charge of the “economic intelligence service”; this is what Swiss law calls industrial espionage. Before leaving for Switzerland, Seith said on the phone: “I’m going to Zurich with a lump in my stomach, because the public prosecutor’s office has been working for years to put me behind bars.”
This was how the first CumEx criminal case came about
Since then, in 2013 he was charged with a claim for damages for the drugstore billionaire Erwin Müller against the Swiss bank Sarasin. Through Bank Sarasin, Müller had invested millions of euros in funds that aim to have one-off capital gains taxes paid multiple times by the tax authorities in order to achieve such high returns. The entrepreneur denied being aware of the scam known today as CumEx.
Since then, he finally got 45 million euros in compensation for his wealthy client, but much more decisive: he collected evidence for the procedure, came across internal bank information and suspicious documents that provided information about so-called CumEx tax deals. Back then it was still a black box – it is now known that banks with this type of tax fraud have not only cost the German state billions of euros.
What does CumEx mean?
CumEx transactions are so named because large packets of shares with (“cum”) and without (“ex”) dividend entitlements were pushed back and forth in rapid succession around the cut-off date for the distribution. The deliberately opaque transactions had only one goal: to create as much confusion as possible among the tax authorities. With this trick, those involved could have capital gains tax refunded on a large scale, which was never paid. The profits have been split. This was made possible by a loophole in the law that has since been closed. By then, the cum-ex business had boomed – for years.
First case of industrial espionage
Since then, the information about the Sarasin-Bank has been passing on information to the responsible public prosecutor’s offices in both Germany and Switzerland. In Germany, according to observers, this marked the beginning of clarification and numerous lawsuits against pullers: the first CumEx dealers have since been convicted, and the scam was confirmed as illegal by the Federal Court of Justice in the summer.
The Swiss judiciary, however, responded to the disclosure of the documents with an indictment: Seith and two German bank employees allegedly involved had to answer in the first instance in 2019 for industrial espionage. It was the first criminal case in connection with CumEx transactions. A trial against educators instead of perpetrators, according to critics back then. The judge acquitted Seith of the allegation of espionage, but accused him of violating his legal duties. All three received fines, and one of the co-defendants was sentenced to probation for violating banking secrecy. Since then, the public prosecutor’s office has appealed when the judgment was pronounced. More than two years later, the process is going into round two.
The wrong one in court?
Not only the accused business lawyer from Stuttgart is looking forward to the process in Zurich. Journalist Oliver Schröm thinks that the Swiss judiciary turned criminal machinations of the banks into business secrets with its first judgment. His investigative research – read in the book “The CumEx Files” – brought crucial insights into the masterminds behind CumEx to light. The Zurich authorities had been investigating him for industrial espionage for years. He had access to the files on his case and the investigation against Seith. “The signal is clear: Anyone who messes with banks or their machinations must expect prosecution in Switzerland,” said Schröm
The citizens’ movement “Finanzwende” showed solidarity with the defendant Seith in the first trial with posters saying “The wrong person is on trial”. She continues to do so. This time the posters in front of the Swiss embassy in Berlin are supposed to send a signal. Board member Gerhard Schick, who was a member of the Bundestag Finance Committee at CumEx in 2011, is even demanding the Federal Cross of Merit for Seith: “He got the public prosecutor off the ground. We as a society owe him a lot. He has ensured that millions in taxpayers’ money are fetched back can.” To this day, he still misses a sign of political support.
Switzerland and its banks
Eckart Seith and his co-defendants face more than ten years in prison if convicted. For him it is unimaginable to be convicted, but as a lawyer he is well aware of the opinion of the other side. “In the eyes of the public prosecutor, I attacked their national assets: the domestic industry, the banking system. Securing Swiss prosperity is paramount.”
For Seith it is already clear: If there is no acquittal, he will again spend hundreds of hours preparing his own defense and continue litigation. If necessary, to the European Court of Human Rights.