CumEx-Files

The CumEx-Files is an investigation by a number of European news media outlets into a scheme discovered by them in 2017. A network of banks, stock traders, and lawyers had obtained billions from European treasuries through suspected fraud and speculation involving es. The five hardest hit countries may have lost at least $62.9 billion. is the hardest hit country, with around $36.2 billion withdrawn from the German treasury. Estimated losses for other countries include at least €17 billion for France, €4.5 billion in Italy, €1.7 billion in Denmark and €201 million for Belgium.

Method
The network stole several billion Euros from the treasury, through what calls a "cum-ex" trade: The participants in the network would lend each other shares in large companies, so that to tax authorities there would appear to be two owners of the shares, when there was only one. The bank that was used in stock trading would then issue a "confirmation" to the investor that tax on the dividend payment had been paid, without it being done. "It’s a bit like parents claiming a child benefit for two – or more – children when there is only one child in the family." writes Correctiv. This practice was outlawed in 2012.

The name "cum-ex" is derived from, meaning "with without", and refers to the disappearing nature of the fraudulent dividend payments.

In cum-ex trades, shares with and without dividend rights were quickly traded between various market participants just before the payout date for the dividend, allowing traders to reclaim double the taxes.

Financial institutions in essence exploited a legal loophole which allowed two parties to simultaneously claim ownership of the same shares, therefore allowing both to claim tax rebates to which they were not entitled.

Authorities have since deemed the reclaims illegitimate, but at the time of the trades, this was less black and white, and a vast network of traders, analysts and lawyers were thought to be involved in the practice throughout the continent.

The elite tax firm gave tax advice which was used to justify the legality of the scheme. In November 2019, Ulf Johannemann, a former Freshfield lawyer was imprisoned.

Discovery
State Commissioner August Schäfer first warned of the practice in 1992, after the testimony of five whistleblowers. However, the practice remained widespread until an administrative assistant in the German noticed abnormally large tax rebate claims from a US pension fund.