Deutsche Boerse Offices Searched in German Tax Fraud Scandal

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(Bloomberg) --

The offices of Deutsche Boerse AG, the operator of the Frankfurt stock exchange, are being searched as part of a probe into one of Germany’s most controversial tax scandals.

The searches are part of investigations into so-called Cum-Ex tax deals and target customers and staff, Deutsche Boerse said in a statement Tuesday. The raids took place at the company’s Clearstream unit in Eschborn, Germany, and Luxembourg, according to people familiar with the investigation.

The Cum-Ex scandal has caught up multiple financial institutions, including Deutsche Bank AG, Bank of New York Mellon Corp. and Societe Generale SA. The controversial transactions took advantage of a now abandoned German practice of taxing dividends, which made it possible to get multiple refunds on a tax paid only once, according to investigators.

The company said it is cooperating with the authorities. Cologne prosecutors confirmed raids were conducted as part of their Cum-Ex investigations but declined to provide more details.

Clearstream learned in 2017 that Cologne prosecutors had started to probe one of its employees for his alleged involvement in the Cum-Ex matter. The company said in a filing last year that prosecutors initiated proceedings to make it a party in the case, which could allow them to seize profits from the disputed deals.

Clearstream is the securities depository for shares listed in Germany. Its services were used in Cum-Ex deals because share transactions were settled by bookings in its system.

Handelsblatt reported the raids earlier on Tuesday.

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