On Tuesday, French officers carried out raids on 5 main banks situated in and round Paris, together with Societe Generale, BNP Paribas, HSBC, Natixis, and BNP’s Exane Financial institution, over alleged costs of cash laundering and monetary fraud. Based on a spokesperson for France’s Monetary Prosecutor’s Workplace (PNF), the preliminary investigation into 4 French banks and one worldwide financial institution started on the finish of 2021.
Cum-Ex Scheme on the Middle of the Investigation; Societe Generale Confirms Involvement within the Raids
Amid the banking crisis plaguing the business in the USA and overseas, French enforcement authorities on Tuesday raided the offices of a number of main banks, together with HSBC, Societe Generale, BNP Paribas, Natixis, and Exane. The PNF prosecution workplace famous that the raids have been based mostly on suspicion of cash laundering and monetary fraud.
“The continuing operations, which have required a number of months of preparation, are being carried out by 16 investigating judges and over 150 investigative brokers,” the PNF stated in an announcement. The raids are tied to an alleged dividend arbitrage scheme often known as “cum-cum” or “cum-ex” practices. The observe includes splitting dividends quickly as a way to keep away from dividend taxes.
Reportedly, the observe is leveraged by the banks’ rich purchasers to keep away from taxation on dividend accounts. The PNF additionally disclosed that six German prosecutors have been concerned within the case. The PNF and collaborating prosecutors imagine that the alleged fraud has value governments $108 billion. Based on a report by CNBC, Societe Generale was the one monetary establishment to verify the workplace raids. A spokesperson for Societe Generale told The Telegraph that the financial institution is “a part of the investigation.”
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