The judiciary has arrested a former high-ranking banker for involvement in “cum-ex” stock deals. The 56-year-old was arrested on Wednesday by the Spanish criminal police in Mallorca based on an arrest warrant from the Frankfurt district court, the Frankfurt public prosecutor announced on Thursday.
The former managing director is accused of initiating and implementing a cum-ex short sale model several times between 2008 and 2010, “leading the way and together with other co-accused”. It is determined because of the suspicion of tax evasion in particularly serious cases. The investigators estimated the tax damage at more than 51 million euros.
The Attorney General’s Office did not name the institute even when asked. According to dpa information, the arrest is related to a search in November 2019 at the German branch of ABN Amro in Frankfurt as the legal successor to Fortis Bank.
In “cum-ex” deals, investors used a loophole in the law to cheat the German state out of money for years. Around the dividend record date, several participants pushed shares with (“cum”) and without (“ex”) dividend rights back and forth.
As a result, tax offices reimbursed capital gains taxes that had not been paid at all. The state suffered billions in damage. In 2012 the tax loophole was closed.