The 1st Criminal Senate at the Federal Court of Justice (BGH) in Karlsruhe has for the first time confirmed a criminal judgment against a German bank manager because of the punishable share group transactions around the dividend record date ("cum-ex").

The conviction of Christian S., formerly head of the balance sheet and accounting and controlling department and authorized signatory of the Hamburg private bank MM Warburg, to five and a half years in prison for tax evasion by the Bonn Regional Court (LG) in June 2021 is still valid.

The criminal senate already rejected the appeal based on procedural complaints and the factual complaints of the accused on April 6th.

This emerges from a decision published on the BGH website on Tuesday.

Marcus Young

Editor in Business.

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With the now confirmed guilty verdict, the prospects of long-time CEO Christian Olearius may deteriorate significantly without being charged from the tax scandal.

Christian S. was considered in the private bank as Olearius' "right hand man", whom the Cologne public prosecutor's office has also held as a suspect for years.

In a landmark decision against two British stock exchange traders, the BGH clarified in July 2021 that the repeated payment of a capital gains tax that can only be refunded once is punishable as "reaching into the state coffers".

On the four pages of its extremely brief decision, the first criminal senate stated that it could not identify any legal errors in the first instance.

The criminal trial against S. in Bonn started in autumn 2020 with severe criticism from the defense.

The indictment has "serious technical errors," said the defendant's lawyers in the direction of the public prosecutor's office.

Her client was not “entirely” involved in certain crime complexes.

In addition, there were factual complaints about the occupation of the criminal chamber and requests for bias.

On request, a Warburg spokesman referred again on Tuesday to the statement from last summer.

The now confirmed verdict against the former employee remains "without any economic consequences" for the bank.

In fact, the criminal court in Bonn had already refrained from further confiscation from the Warburg Group and its investment subsidiary in winter 2021.

Last hope Constitutional Court

Banker S., who has been finally convicted, still has the option of appealing to the Federal Constitutional Court.

But there is a certain line to the cum-ex transactions: A few weeks ago, MM Warburg failed with its constitutional complaint against the court-ordered confiscation of 176.5 million euros in income from the stock transactions.

Since then, one thing has been certain: the state can reclaim the profits from these transactions, even for acts that are already statute-barred, at least from a tax point of view.