JPMorgan Chase & Co.'s Frankfurt offices are being raided by Cologne prosecutors as part of their vast probe into the controversial Cum-Ex scandal that robbed taxpayers of billions of euros.
The U.S. bank confirmed in a statement that it was visited by officials and said that it continues "to cooperate with the German authorities on their ongoing investigation."
A spokesman for Cologne prosecutors on Wednesday said searches at an unidentified bank started on Tuesday and include the homes of four suspects as well as an auditing firm that isn't a target in the probe. More than 50 officers are involved, including specialists to unearth evidence buried in emails. The investigators are also looking for evidence of deals similar to Cum-Ex.
While dating back more than a decade, the Cum-Ex scandal is still roiling the financial industry — including some of Wall Street's biggest firms.
Prosecutors in Cologne are probing about 1,500 people and are ramping up the pressure on international banks. They raided Barclays Plc's Frankfurt offices in March days after Bank of America Corp.'s Merrill Lynch premises were hit. Morgan Stanley's offices were searched in May.
Cum-Ex was a trading strategy that siphoned off at least 10 billion euros ($10 billion) in government revenue. Named for the Latin term for "With-Without," the deals took advantage of German tax laws that seemed to allow multiple investors to claim refunds of a tax on dividends that was paid only once. The nation moved to abolish the practice in 2012.
The dividend tax scandal has been called the biggest tax-dodging scheme in German history and has been officially declared an illegal practice by the country's highest court. At the height of the practice more than a decade ago, investors rapidly traded shares to earn duplicate refunds on dividend tax.
There are four trials currently underway in the country against bankers and a lawyer. Four bankers were convicted in earlier cases. In July, Cologne prosecutors
