(Bloomberg) -- M.M. Warburg & Co. lost a bid at Germany's constitutional court to challenge a landmark judgment backing the seizure of 176 million euros ($186 million) from the bank for its involvement in Cum-Ex trades.
Warburg was originally told to give up the money in a 2020 verdict from a Bonn tribunal following Germany's first Cum-Ex trial that centered on transactions linked to the lender. That decision was upheld by Germany's top criminal court in a ruling last July whose judges called the controversial trading strategy criminal and a “blatant money grab.”
The Hamburg-based bank argued the criminal courts relied on rules that were unconstitutional as they retroactively allowed the seizure of funds tax authorities could no longer have claimed due to time limitations.
The Federal Constitutional Court in Karlsruhe said in a statement on Friday that the retroactive application of the law was justified because of the outstanding importance of the matter.
The decision “has no economic effects, because all tax claims asserted against the bank by the tax authorities because of the so-called cum-ex transactions had already been settled in 2020,” Warburg said in a statement.
Cum-Ex was a trading strategy that siphoned off at least 10 billion euros in government revenue. Named for the Latin term for “With-Without,” Cum-Ex took advantage of German tax laws that seemed to allow multiple investors to claim refunds of a tax on dividends that was paid only once. The nation moved to abolish the practice in 2012.
Warburg owners Christian Olearius and Max Warburg lost a similar challenge in December before the same court.
Friday's case is: BVerfG, 2 BvR 2194/21.
©2022 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
