It is a success for cum-ex-whistleblower Eckart Seith: The Zurich High Court has overturned an earlier criminal judgment of the Zurich District Court against the German lawyer and two former employees of Bank J. Safra Sarasin for industrial espionage and violations of Swiss banking laws and for the second time Negotiation remitted to the first instance.

Marcus Young

Editor in Business.

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The reason given by the Swiss judicial authorities in a statement was the bias of the public prosecutor who was investigating at the time.

As a result, a large part of the evidence presented by the prosecutors against Seith and the co-defendants was no longer usable.

Now the public prosecutor's office in Zurich and the court would have to reopen the case "in order to repeat the evidence that could not be used".

The defense had made five applications for bias in the years of criminal proceedings without success, with the sixth application they were successful with the Supreme Court.

"My trust in the Zurich judiciary has been restored by the decision of the High Court," said Eckart Seith in an interview with the FAZ

Unusual proximity to the bank

In the oral hearing on December 8 last year, the Zurich Higher Court severely criticized the public prosecutor's evidence.

The appointment, originally scheduled for two days, was canceled after just a few hours.

The presiding judge, Rolf Naef, stated that he considered the lead public prosecutor, Peter Giger, to be biased due to his unusual proximity to Bank Sarasin.

This impression should also have continued for the following public prosecutor.

With a decision of December 17, to which the Supreme Court pointed out in a notification on Friday, Naef overturned the earlier judgment.

On the 16 pages available to the FAZ, the chairman of the 1st Criminal Chamber takes a tough stance with his fellow judges in the first instance and the public prosecutors responsible for white-collar crimes.

The "Cum-ex" whistleblower Seith had pointed out irregularities at the private bank Sarasin (today J. Safra Sarasin) for years and provided German financial and law enforcement authorities with information. In Switzerland, too, there was a criminal complaint that the public prosecutor's office in Zurich had had for a long time, but which in turn targeted the whistleblowers after criminal complaints from the bank. "If a complaint remains unprocessed for years and the other complaint is followed up with vehemence, this can at least give the impression that the investigating public prosecutor has already sided with one party and is pursuing their point of view with much greater commitment," writes Naef in his decision.

According to Bank Sarasin, Giger "obviously had so much free capacity" that he even had houses in Germany searched.

However, the prosecutor did not do anything to protect the interests of the other advertisers.

Much of the evidence is useless

Giger's behavior also worked to the detriment of his successor.

According to the Supreme Court, his charges and the evidence presented are largely based on Giger's findings.

They are therefore also not usable to the detriment of the accused, according to the decision.

In addition to overturning the verdict, the court ordered the three defendants to receive trial damages of more than 225,000 Swiss francs.

The progress of the criminal proceedings must now be determined by the district court, which negotiated the matter in 2019.

It must examine whether the actual charge is to be held on the basis of the meager evidence or whether the complete hearing of the evidence must be repeated.

However, the first instance can also refer the procedure back to the investigative authorities in its entirety.

"I don't expect there to be any negotiations at all," says Seith.

“There are no more charges for that. 

High tax damage prevented

Bank Sarasin had processed cum-ex deals for investors such as drugstore entrepreneur Erwin Müller via Luxembourg's Sheridan funds.

In 2013, two bank employees passed on internal documents to Seith, including an expert opinion from the commercial law firm Freshfields.

For the Stuttgart lawyer, this meant that the stock group transactions with short sales around the dividend date were illegal.

He shared this information with the Cologne public prosecutor's office, so that the unauthorized reimbursement of up to 460 million euros by the tax authorities could be stopped.

There is now an indictment for serious tax evasion against a senior employee of Bank Sarasin at the Bonn Regional Court.

The Swiss banker has so far avoided the process.

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