A London stock trader has been convicted in the cum-ex scandal.
(Photo: dpa)
Cologne The Bonn district court sentenced fund manager S. from England on Tuesday for aiding and abetting tax evasion. The court sees it as proven that S. helped cheat the German state with cum-ex deals.
The accused is spared jail: the judge suspended the sentence of two years on probation. Due to a procedural delay by the Cologne public prosecutor’s office, two months of this sentence have already been enforced. In addition, S. has to transfer 60,000 euros to the judiciary. These are bonus payments that S. received for his actions.
The money comes from Duet’s illegal cum-ex deals. The Latin term describes stock group transactions around the distribution date with (“cum”) and without (“ex”) dividends. For more than ten years, there have been investigations into the practice of banks and investors of having capital gains tax paid only once reimbursed twice.
In the past week it has already become apparent that S. will be given a suspended sentence. The public prosecutor explained in their plea that they see S. as an accomplice and not as an accomplice. That’s a qualitative difference. Although S. knew that the profits from the stock transactions he processed came from the German tax fund, he was not the driving force behind his company Duet. Therefore, the prosecutors pleaded for a two-year suspended sentence.
S.’s defense attorney admitted that his client was partly responsible, but at the same time emphasized that S. had acted “only on behalf and on the instructions” of his superiors. A maximum of one year’s probation is therefore appropriate. The court now largely followed the prosecutor’s request.
The Duet bosses face tougher penalties
However, the proceedings against Duet employee S. were only a foretaste of what is to come. Because after the summer break – a process is planned to start in the second half of August – three former Duet partners have to appear in the dock. European arrest warrants have already been issued for all three of the accused. The men were only spared pre-trial detention after paying bail in the millions.
Duet co-founder Henry Gabay had to post the highest bail of three million euros. He was even arrested in France on June 22, 2020 and placed under house arrest. On July 16, 2020, the French authorities extradited him to Germany. The district court in Bonn released him at short notice after he had deposited the money. Gabay rejects the allegations.
Prosecutors believe the trio and other suspects were behind the deals. In total, those involved in the business applied for reimbursements of more than 215 million euros. Sometimes it was just an attempt. But according to the findings of the investigators, the Munich tax office and the Federal Central Tax Office paid out 93.4 million euros. The public prosecutor’s office attributes a high double-digit million profit to the three accused Duet partners. The bonus payments that the now convicted S. received were hardly worth mentioning in comparison.
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