A former senior banker at M.M. Warburg & Co. who was sentenced to 5 1/2 years for his role in the Cum-Ex trading scandal failed in his bid to challenge the conviction at Germany’s top court.
(Bloomberg) — A former senior banker at M.M. Warburg & Co. who was sentenced to 5 1/2 years for his role in the Cum-Ex trading scandal failed in his bid to challenge the conviction at Germany’s top court.
The Federal Constitutional Court rejected his claim that the presiding judge at his trial was biased, the tribunal said in an emailed statement on Friday. The fact that the judge as well as one of his colleagues on the bench had already reviewed the banker’s actions in a previous related case didn’t amount to a constitutional violation, the court ruled.
The man was convicted in June 2021 and has lost a previous appeal against the verdict. He started to serve his jail term at the beginning of the year. The constitutional court has already rejected other complaints filed over Cum-Ex verdicts, which all were related to the Warburg probe.
The ex-banker’s defense lawyer Alexandra Schmitz said she will review the written decision and then decide whether to take further steps.
The top judges said that Cum-Ex transactions are typically done by a large number of employees from various banks and in different roles and combinations. Criminal courts can’t try all suspects at once, because that would take too long and excessively burden those individuals with minor roles, violating their right to a speedy trial.
The Cum-Ex scandal has engulfed swathes of the finance industry, including some of Wall Street’s biggest banks, because it required the participation of multiple players, from traders to brokers and lawyers.
In the schemes, shares were rapidly traded to earn duplicate tax refunds on dividend payments. The strategy may have cost taxpayers more than 10 billion euros ($10.6 billion) by the time Germany revised its tax rules in 2012. There are now 1,600 suspects probed over Cum-Ex.
The case is BVerfG, 2 BvR 1122/22.
(Updates with defense lawyer comment in fourth paragraph)
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