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German prosecutor Morgan Stanley has investigated the tax case

German prosecutors searched Morgan Stanley‘s

ANDEREA 1.55%

The Frankfurt office on Tuesday has been involved in a fraud investigation that has plagued several financial companies across Europe on Tuesday.

In addition to the bank, authorities searched the homes of two suspects in the case, Cologne prosecutors said. The aim was to gather e-mail and written correspondence, he added.

“The investigation is a historic activity and we continue to work with the German authorities,” said a spokesman for Morgan Stanley.

The probe focuses on cum / ex historical transactions, which are trades that take place a few days before and after the date of payment of corporate dividends.

Cum / ex transactions typically involve banks, brokerage firms, hedge funds, and wealthy individuals buying, borrowing, and selling shares in a short period of time regarding the payment of dividends. The carefully coordinated timing of transactions has allowed many parties to demand a refund for taxes paid on dividends.

German officials argue that tax credits have been artificially requested through these types of trade in a way that could be fraudulent. The German government has done so to prevent such transactions in the country and closed the tax gap in 2012.

German authorities searched Bank of America Corp..

and Barclays PLC in March for the same investigation.

“The prosecutor’s investigation relates to the historic activity of 2006. We are working with the authorities to assist in their interrogations,” a Bank of America spokesman said. A Barclays spokesman said the bank was cooperating with authorities.

Cologne prosecutors are investigating about 1,500 suspects in 110 cases, he said in an email response. The Bonn Court has already sentenced several defendants to prison, he added.

Other countries have also placed probes, including Denmark and Austria. The German, which involves prosecutors from Cologne, Munich and Frankfurt, has been around for years. In many cases, the bankers involved are no longer working for the banks.

Some banks have agreed with the authorities on cum / ex related issues. Hypovereinsbank, UniCredit SpA.

The German unit paid a total of 19.8 million euros, the equivalent of about $ 20.9 million, in fines for settlements between 2015 and 2017.

Shares of Morgan Stanley rose 1.5% early Tuesday.

Write to Patricia Kowsmann at patricia.kowsmann@wsj.com

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German prosecutor Morgan Stanley has investigated the tax case

Source link German prosecutor Morgan Stanley has investigated the tax case

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