Swiss authorities have raided the offices of private bank Bank J. Safra Sarasin in connection with a German investigation related to cum-ex dividend deals, which is an investment strategy used to lower clients’ tax exposure.
The bank said that its Basel and Zurich offices have been searched on the basis of a request for legal assistance by prosecutors in Cologne and Frankfurt associated with cum-ex transactions.
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Authorities have also searched 20 private offices and homes in various Swiss cities in association with the probe.
However, the bank said, "These transactions date back to a time when the bank was still owned by Rabobank. Bank J.Safra Sarasin has never set up or distributed such cum-ex products."
Cum-ex, or dividend stripping deals are based on trading shares both with and without entitlement to a dividend payout, which is a strategy to reduce tax of clients.
However, a loophole in the German law that offered a boost to the strategy, was phased out in 2012.
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By GlobalData
