5.2 billion euros in damages caused by Cum Ex Dividend transactions – Public prosecutor’s office offering bankers way to avert prison

10 billion or even 30 billion euros? So far, these have been the dimensions that circulated as rough estimates in terms of cum-ex transactions. German and international Banks and Stock traders made their capital gains on dividend taxed paid by German tax authorities – they were refunded several times because the bankers booked shares between different owners at lightning speed.

There is now a concrete figure. According to the Federal Ministry of Finance, the damage to the German tax payer is said to amount to 5.3 billion euros (417 suspected cases), according to statements to the “SZ” newspaper. A sum of 2.4 billion euros has already been claimed back, or not paid out as a refund at all, because the suspicion of multiple disbursements had been raised.

Prison sentences for bankers?

The public prosecutor’s office in Cologne, which is responsible for this case, is also supposed to have urged banks in Germany and abroad to cooperate and to make a completely clean sweep – i. e. to disclose all cum-ex transactions and to reimburse sums in full. Only those who make amends for the resulting tax damage can escape imprisonment. Tax evasion brings about 10 years in prison in Germany – officially!

But hey, this is about bankers. No, please, no socially critical malice against bankers. But let’s face it. In recent years, has only one banker in Germany has been sentenced to imprisonment in connection with the financial crisis. No matter what came up, Hypo Real Estate, HSH Nordbank etc. Under no circumstances could it be proved or wanted to prove that bank boards or other executives had done anything bad at all.

After all, what is embezzlement or fraud? In the end, it’s always bad luck or bad business policy, isn’t it? And that’s not punishable. And when it comes to Cum-Ex, we already have an idea what will come out of it in german courts. The defendants (if there should be any) will argue with their lawyers that at the time of the deal, as well as today, it is not at all clear that these deals are criminal.

It should be criminal in principle when claims for reimbursement are credited several times. But you don’t mus have too high hopes in the german justice system. At the end of the day, something like Mr. Funke from Hypo Real Estate, who had to pay a fine of a few thousand euros, will probably come out. It seems to be deeply subconsciously slumbering in the German judicial system (state attorneys and courts) – the idea that the German banking system is a central component of the state raisonné and must be protected, no matter what happens. For the “normal” folks out there the german banking system must look good and healthy – so that the fearful German small saver always has confidence in it? That’s how it seems.

The real Scandal

Abroad (for example, in the UK) bankers go to prison for years (see LIBOR scandal). What about Germany? We have no hopes for justice. The public prosecutor’s office in Cologne has already hinted at it. Full cooperation and repayment by the banks, then there are no prison sentences. Can the same thing be done for bank robbers? Whoever is investigated as a perpetrator must fully reimburse the stolen cash  to the bank, then there is no prison sentence, but only a few hours of social work?

That is the real scandal of the matter. That the judiciary is already making the accused an offer during the investigation to prevent them from being sentenced to jail – something like this is only possible in the German banking industry, isn’t it? It´s a scandal!


Bank towers in Frankfurt. Photo: Christian Wolf, www.c-w-design.de / Wikipedia (CC BY-SA 3.0 DE)

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