(Bloomberg) — Five German ex-bankers must stand trial over their involvement in Cum-Cum tax deals struck more than twenty years ago at Deutsche Pfandbrief after a Frankfurt appeals court overturned a decision throwing out the case. The charges are rooted in tax-driven deals that took place between 2004 and 2006, according to the Frankfurt ruling. Prosecutors investigated the transactions and filed charges in September 2021. A court ruled in February last year that it won’t go to a trial. Prosecutors appealed and the Frankfurt judges sided with them. It’s the first known criminal case linked to Cum-Cum deals to be tried in Germany and prosecutors will need to test in court whether the strategy was criminal. In contrast to Cum-Ex where traders exploited dividend payout laws across Europe to reap duplicate tax refunds. Cum-Cum trades entail selling stocks during dividend season, shuffling them from one jurisdiction to another, ducking the taxes that governments impose on dividends. The practice is also known as dividend arbitrage. Cum-Cum has long been considered less controversial and was more widely practiced than Cum-Ex. Germany has meanwhile changed its tax codes to stop both practices. Deutsche Pfandbrief AG was one casualty of the 2009 financial crisis. Part of its assets were later transformed into Deutsche Pfandbriefbank AG. A spokesman for that lender said the charges relate to action of the predecessor entity and are targeting employees who long left the company. The tax claims stemming from the deals were already paid many years ago, he added. More stories like this are available on bloomberg.com ©2025 Bloomberg L.P.
Five bankers are set to go to trial over tax-related deals in Germany.
