The offices of JPMorgan Chase in Frankfurt were raided earlier by Cologne prosecutors as part of their wide-ranging investigation into the Cum-Ex scandal, which cost German taxpayers billions of dollars, Bloomberg reports.
The US bank confirmed that officials had visited its offices, noting that it “continues to cooperate with the German authorities as part of the ongoing investigation”.
A spokesman for the Cologne public prosecutor’s office said an investigation at an unnamed bank began on Tuesday, while the homes of four suspects were also searched, as well as an accounting services firm that is not the target of the investigation. More than 50 officials are involved in the investigation.
Although its duration stretches back more than a decade, the Cum-Ex scandal is still creating turmoil in the financial industry – even at the biggest firms on Wall Street, Bloomberg points out.
Cologne prosecutors are investigating more than 1,500 people and stepping up pressure on internationally active banks.
Barclays’ offices were also raided in March, while Bank of America’s Merrill Lynch was investigated earlier. Morgan Stanley’s offices were raided in May.
Cum-Ex was a trading strategy that deprived more than €10 billion of government revenue, with the deals exploiting loopholes in German tax law that allowed more than one investor to claim tax refunds on dividends that had only been paid once.
Germany abolished this practice in 2012.
Source: Capital
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