Ex-London Bankers Spared Second Cum-Ex Trial Amid Covid-19

Two former London investment bankers who have already been convicted in Germany’s first Cum-Ex case were split from a second trial scheduled to start this month because of travel restrictions linked to the coronavirus pandemic.

The two men, Martin Shields and Nicholas Diable, who were the first traders convicted in Germany for their involvement in Cum-Ex, could still be tried at a later date, a spokeswoman for the Wiesbaden court said on Tuesday. Neither man lives in Germany.

Cum-Ex was a controversial trading strategy that took advantage of the way revenue on dividends was collected to obtain duplicate tax refunds. Germany is looking at as many as 1,000 suspects from across the financial industry in probes linked to the practice.

The case in Wiesbaden was filed by Frankfurt prosecutors in 2017 over trades at UniCredit SpA’s HVB unit in London. Among the accused was also the two men’s ex-boss, Paul Mora, as well as two former Germany-based HVB bankers and tax lawyer Hanno Berger.

A spokesman for Shields said his lawyer Hellen Schilling had asked for the delay. Diable’s lawyer, Stefan Kirsch, said the ruling is a result of his request to have the presiding judge removed from the case after she made an erroneous ruling over the participation of a lay judge.

The coronavirus has already wreaked havoc with the prosecution in a probe that was opened in 2012. The Wiesbaden trial start has been postponed twice because of Covid-19. It’s likely that the proceedings will start only with two German bankers as the only defendants present later this month.

The court had already split off Mora after he said he won’t leave his native New Zealand to face the charges. Germany has now issued a warrant for him him via Interpol. Berger, a tax lawyer, has informed the court he won’t leave his home in Switzerland, citing health reasons.

The Cum-Ex rush that cost German taxpayers an estimated 10 billion euros ($12 billion) ended in 2012 when the country changed its rules.

©2021 Bloomberg L.P.

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