The Bonn district court sees the highly controversial Cum Ex stock deals as unjust. The targeted multiple reimbursement of taxes could therefore be considered a criminal offense.
"Cum-Ex-business in the case condemned here are punishable," said the chairman Judge Roland Zickler. The basic punishability of the business was already expressed by the fact that the criminal proceedings had even been opened. The court issued a preliminary assessment of the mammoth trial that started in September.
"The criminal liability in general does not mean that the two defendants are to be punished here," said Zickler. In Bonn two British ex-stock traders are accused, which are accused particularly heavy tax evasion in 33 cases as well as an attempt. According to the indictment, the German state is said to have suffered losses of 447 million euros.
It had to be further examined which facts could actually be charged against the defendants and whether the men acted as accomplices or merely as helpers. However, the court has already suggested that "close cooperation with law enforcement agencies" should have a mitigating effect on the verdict. Both had already stated extensively before the trial started.
That's how the trickery worked
In the case of cum-ex transactions, investors were able to reimburse the once paid withholding tax on stock dividends with the help of banks several times. For this purpose, they postponed shares among each other around the dividend payment deadline - ie cum and without ex - dividend entitlement. Overall, the state is said to have lost a two-digit billion-euro amount. A decision is expected in Bonn at the earliest in January 2020.
It became clear in the process that there was no business sense for the business, the judge said. Participating institutions could threaten the confiscation of the profits obtained. This also applies to investors who are not involved in the process in Bonn and have benefited from the tax deals.
At the district court Bonn also five money houses must give the judges information. According to Zickler, this is the holding company of the Hamburg private bank MM Warburg, its subsidiary Warburg Invest, the funds of the French bank Société Generale and the US-based BNY Mellon and the Hamburg capital management company Hansainvest.
"The Chamber is far from wiping banks on a flat rate," said the judge. "What we've seen are numerous examples of misconduct," he continued, "It was a collective grab in the treasury."
