On Tuesday, French officials raided five major banks located in and around Paris, including Societe Generale, BNP Paribas, HSBC, Natixis and BNP’s Exane Bank, on alleged charges of money laundering and tax fraud. According to a spokesperson for the French Financial Prosecutor’s Office (PNF), the preliminary investigation of four French banks and one international bank began at the end of 2021.
Cum-Ex Scheme at the Research Center; Société Générale confirms its involvement in the raids
Amid the banking crisis plaguing the industry in the United States and abroad, French law enforcement authorities on Tuesday they raided the offices from several major banks, including HSBC, Societe Generale, BNP Paribas, Natixis and Exane. The PNF prosecutor’s office said the raids were based on suspicions of money laundering and tax fraud.
“The ongoing operations, which have required several months of preparation, are in charge of 16 investigating judges and more than 150 investigative agents,” the PNF said in a statement. The raids are linked to an alleged dividend arbitrage scheme known as “cum-cum” or “cum-ex” practices. The practice is to split dividends temporarily to avoid dividend taxes.
Banks’ wealthy clients reportedly take advantage of the practice to avoid taxes on dividend accounts. The PNF also revealed that six German prosecutors were involved in the case. The PNF and collaborating prosecutors believe that the alleged fraud has cost governments $108 billion. according to a report Per CNBC, Societe Generale was the only financial institution to confirm the office raids. A spokesperson for Société Générale said The Telegraph that the bank is “part of the investigation”.
What do you think about the alleged fraud of 108,000 million dollars by five major banks? Share your thoughts on this topic in the comments section below.
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