processes
Cum-Ex verdict: Accused gets three and a half years in prison
The Bonn Regional Court has convicted a former managing director of a subsidiary of the Hamburg private bank MM Warburg for tax fraud. Photo: Oliver Berg/dpa
© dpa-infocom GmbH
The former managing director of a subsidiary of the Hamburg private bank MM Warburg has been convicted of tax evasion. He has to go to jail.
In the multi-billion dollar cum-ex tax scandal, the Bonn district court has made another judgment. A now 63-year-old was sentenced to a total of three and a half years in prison for tax evasion in two counts, a court spokeswoman said on Wednesday.
The former managing director of a subsidiary of the Hamburg private bank MM Warburg is said to have caused tax damage of 109 million euros with the transactions in which he was involved.
With the guilty verdict, the court fell well short of the demands of the public prosecutor, who had pleaded for seven years in prison. The defense had found a suspended sentence appropriate. When sentencing, the chamber took into account the comprehensive confession of the accused, said the court spokeswoman.
The Bonn regional court and the Cologne public prosecutor’s office play a central role in processing the cum-ex transactions because the Federal Central Tax Office is based in the former federal capital. The first cum-ex criminal trial took place at the district court in 2019 and 2020, which ended with a guilty verdict against two former stock traders. Another Bonn trial later also resulted in the conviction of a defendant.
confusion games
The first case ended up before the Federal Court of Justice, which confirmed the stance of the Bonn judges last summer. This decided that Cum-Ex was not just a brazen rip-off exploiting a loophole in the law, but a criminal offence. A large number of other cum-ex criminal proceedings will keep German courts busy for a long time to come.
In “cum-ex” transactions, banks and other financial players pushed stocks with (“cum”) and without (“ex”) dividend rights back and forth around the dividend record date. The aim of the confusion was the refund of taxes that had not been paid. According to estimates, the state lost a two-digit billion euro amount as a result. The heyday of Cum-Ex was between 2006 and 2012.