German stock exchange operator raided in ‘cum-ex’ probe

German prosecutors extended their investigation into so-called “cum-ex” tax fraud Tuesday with officials raiding Clearstream Banking, a subsidiary of German stock exchange operator Deutsche Boerse.

“Searches of the group’s premises” took place “as part of international investigations into cum-ex cases,” a Deutsche Boerse spokesperson told AFP, confirming reports by business daily Handelsblatt.

The “cum-ex” scam, first exposed in 2017, has cost several European countries billions of euros, with Germany the hardest hit nation.

The search of the premises in Eschborn near Frankfurt of the Deutsche Boerse group subsidiary was “directed against customers and employees” of the group which is “cooperating fully with the investigating authorities,” the spokesperson added.

The Cologne prosecutor’s office confirmed to AFP that “search warrants were issued in the cum-ex case against several suspects” without giving details.

As part of the case, Cologne investigators have been looking since September 2017 into Clearstream Banking, which specialises in the transfer of securities.

The illegal “cum-ex” share deals involved multiple cooperating participants quickly exchanging stock in companies amongst themselves around dividend day so fast that tax authorities could no longer identify who the true owner was.

Complex changes of ownership allowed them to claim tax rebates on a single payout several times over before sharing out the proceeds.

Used across Europe, this practice cost Germany 7.2 billion euros ($8.2 billion), Denmark 1.7 billion euros and Belgium 201 million euros since 2001, according to an investigation published last October.

German lawyer Hanno Berger, identified as the mastermind of the scam, has been awaiting trial since May 2018.

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