BNY Mellon, Warburg Group, Deutsche Bank to pay $60 mln in ‘cum-ex’ case


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Bank of New York Mellon Corp, Germany’s Warburg Group and Deutsche Bank, will pay 60 million euros ($59.85 million) to German tax authorities over the country’s “cum-ex” tax scandal, the German lender said on Monday.

“Cum-ex” refers to a scheme under which banks and investors would swiftly trade shares of companies around their dividend payout day, blurring stock ownership and allowing multiple parties to falsely reclaim tax rebates on the dividends.

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Deutsche Bank will share in the payment to be made by Bank of New York Mellon, a Deutsche spokesperson said in an emailed statement, adding that the breakdown of the payment is subject to a confidentiality agreement between the parties.

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The payment covers tax liabilities of a fund called BC German Equity Special Fund, which a Warburg subsidiary managed as an investment company in 2009.

The custodian bank was BHF Asset Servicing, German daily Handelsblatt reported on Sunday, which was later acquired by the U.S. bank, while Deutsche Bank eventually absorbed its previous owner investment firm Sal. Oppenheim.

Deutsche Bank will contribute an amount of less than 10 million euros to the payment, Handelsblatt said.

BNY Mellon said the Handelsblatt report contained inaccuracies and false misrepresentations. Deutsche bank said the final amounts may still be reduced in light of any third-party payments, without giving further details on the payment.

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The Warburg Group did not immediately respond to a request for comment.

The scandal has blighted German political and financial circles for several years, with lawmakers claiming it has cost taxpayers billions of euros.

A large number of banks have been searched by prosecutors investigating possible wrongdoing, with German branches of Barclays, Bank of America and Morgan Stanley among those raided in recent months.

Government officials say the investigation involves some 100 banks on four continents and at least 1,000 suspects.

($1 = 0.9985 euros) (Reporting by Shivani Tanna, Jyoti Narayan and Jose Joseph in Bengaluru; Editing by Frank Jack Daniel, Diane Craft, Kirsten Donovan)



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