Deutsche Bank AG defeated a final attempt by M.M. Warburg & Co. to make it pay a €63 million ($69 million) tax bill linked to the sprawling Cum-Ex scandal that’s ensnared some of the world’s biggest financial firms.
(Bloomberg) — Deutsche Bank AG defeated a final attempt by M.M. Warburg & Co. to make it pay a €63 million ($69 million) tax bill linked to the sprawling Cum-Ex scandal that’s ensnared some of the world’s biggest financial firms.
The Federal Court of Justice, Germany’s top civil court, rejected a request by Warburg to be allowed to appeal a lower-court ruling in the dispute. The order was issued a week ago but hasn’t been made public yet, according to the court’s press office.
Warburg had sued in a Frankfurt court to make Deutsche Bank pick up the tab for part of a bill related to deals that were under review in Germany’s first Cum-Ex trial, in Bonn, which ended with convictions of a pair of British traders in 2020. Both the trial and appeals courts in Frankfurt dismissed the action.
Warburg argued that Deutsche Bank was responsible for transferring money to the tax authorities more than a decade ago — as part of its role as a custodian for the short seller in the disputed transactions.
Cum-Ex trades, named for the Latin term for “With-Without,” took advantage of German tax laws that seemed to allow multiple investors to claim refunds on a dividend levy that was paid only once. The practice ended in 2012 when Germany revised its rules and the trades may have cost taxpayers more than €10 billion.
The top judges didn’t give any reasons for their decision so Warburg can’t comment on the ruling, a spokeswoman for the Hamburg-based bank said in an email.
The case is: BGH, XI ZR 65/22.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.