Cum/Ex is officially a money grab

usinesspeople grabbing moneyIt’s now official. The Cum/Ex was not a loophole but a pure and simple money grab.

 

The German supreme court (aka, the German Federal Court of Justice) has backed the conviction from two former London investment bankers from MM Warburg, and upheld the seizure of Eur 176 m of profits from MM Warburg.

It also confirmed what the German law thinks of the whole Cum/Ex trading strategy:

This was no loophole,” Rolf Raum, the presiding judge, said in explaining the verdict. “It was a blatant grab from the bag that holds all taxpayers’ contributions.

 

Warburg expressed its disappointment and commented that “it hadn’t been given a fair chance to defend itself the seizure of the money,” and “is now considering its next legal steps.”

Well, good luck on your next step. Not only the private bank is unlikely to survive the judgement, but it confirms that thousands of suspects involved in the tax transactions are likely to end up in jail.

 

The first of many

Dozens of companies are entangled in that net

  • ICAP was a main broker for those trades, and ends-up as a nexus of the litigations
  • Macquarie revealed in 2018 that 30 of its staff are involved, including its CEO, after a leak put it in evidence.
  • German prosecutors have filed more indictments against bankers and attorneys. To the point that the courts of justice are doubling their staff or building new offices to handle the court proceedings.
  • The FCA considers the trading strategy as abusive, and is collaborating with European authorities.
  • In November 2019, German authorities raided 19 locations simultaneously in various parts of Germany.
  • The Cologne prosecutors are conducting at least 10 investigations.
  • J. Safra Sarasin is also involved after a whistleblower leaked information to Swiss authorities.
  • A Commerzbank‘s board member resigned after the German government lost confidence in him.
  • HSBC Deutschland confirmed it is under investigation and cooperating, but denies its participation.

 

To be continued… for the years to come…

 

 

References from the press

Previous Navesink articles

 

Bloomberg-article-not-a-Loophole-but-a-blatant-money-grab

Select your list(s):

Read our privacy policy for info.

Follow on LinkedIn

Click here to follow Gontran de Quillacq

If already following, go to LinkedIn profile

Written by Gontran de Quillacq

Gontran de Quillacq is an expert witness and a legal consultant. He is a recognized authority in options, trading, derivatives, structured products, portfolio management, hedge funds, mathematical finance, quantitative investment, strategy research and financial markets in general.

0 Comments

Submit a Comment

Your email address will not be published.

You May Also Like…

The Russian Economy Is Tanking

The Russian Economy Is Tanking

Russian economic statistics are not reliable anymore, but Yale academics have recalculated key metrics. The result is clear. The economic sanctions are crushing the Russian economy.
Based on that research, Foreign Policy journalists are debunking nine key propaganda myths about Russia’s economic strength.

read more
More crypto dominoes are falling

More crypto dominoes are falling

Voyager Digital, the crypto execution broker, has just filed for bankruptcy.
Add this failure to the list of cascading failures in the digital space.
Unfortunately, with no regulation and capital buffers, more dominoes will fall, and with little recourse for the other players.

read more

Pin It on Pinterest