German prosecutors raided the Frankfurt offices of Morgan Stanley as part of their wider probe into the controversial Cum-Ex scandal that robbed tax payers of billions of euros.
Morgan Stanley confirmed that its premises were targeted and said the investigation relates to a “historic activity” and that the bank is “continuing to co-operate with the German authorities”. Cum-Ex was a trading strategy that siphoned off at least €10bn in government revenue. Named for the Latin term for “With-Without,” the deals took advantage of German tax laws that apparently allowed multiple investors to claim refunds of a tax on dividends that was paid only once. The nation moved to abolish the practice in 2012.
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