Our 101 CUM-EX dividend fraud explains how this fraud works and also details a range of businesses and individuals who are linked and those that are secondary linked to the businesses.
It is clearly very important AML operators check their systems for trades between the named entities herein and cross match with short sales of equity that is subject to dividend payout imminently .
CYW.SOLUTIONS can receive anonymous whistle-blowing reports for trades that have been made in German (or touch the German economy) or in USD. Please note we will assist whistle-blowers to be rewarded significant amounts if a case moves to prosecution and tax recovery. Up to 30% of tax reclaimed can be paid out to whistle-blowers in rewards. We stand ready to support any reporting persons with legal and operational help.
Cum-Ex frauds are essentially circular frauds where shares are purported to be bought and sold at the time of year the company is paying dividends. Some classes of share can lawfully reclaim tax paid on dividends and it is this the fraudsters seek to exploit.
Essentially, the company pays out a dividend and the lawful entity owning the shares receives a certificate from their bank to reclaim dividend tax. At the same time a second party, let’s vall him a ‘broker’, short sells the same shares to a third party.
That third party, after the dividend is paid to the original owner receives the shares and immediately claims a tax certificate from the bank for buying the shares and getting a dividend. It is this second reclaim of tax that is the fraudulent one. Once the dividend tax certificate is received the third party sells the shares back to the original owner. In essence the broker has short sold the shares in order for the third party to reclaim the tax, that has never actually been paid.
The second reclaim is then shared amongst all three parties.
What can AML Operatives be on the look out for?
- Professional investors capital investment and hedge funds.
- Over complicated trades.
- Short selling with no apparent linked long term strategy.
- Repeat dividend payouts over 12 months for non-PLC’s
- Businesses tending to be LLCs/LLPs
- Banks issuing tax rebate certificates frequently and linking trades shortly after.
- Repeatedly trading the same shares from the same or similar named businesses.
- Noticing the same registered addresses or legal/natural persons linked.
- Utilising the same brokers/lawyers/investment managers/investors.
Blow the Whistle…
For any operator who cannot raise this internally or isn’t being listened to, speak to us anonymously through our application. It is encrypted and we will contract to secure your identity while we seek financial reward in the US or other jurisdiction.
Entities linked.
The data either directly links a legal/natural person or does so through association. We do not warrant they are involved in criminality or suspected but simply linked to each other warranting AML department checks.
NB: We can supply detailed data relating to the linked entities, linking them graphically so you can see the connections to each other. Any enquiries for this via our contact form .
For a detailed analysis of the links between these entities and to gain the full network, contact us
