Financial crime specialists Rahman Ravelli tells the New York Law Journal what to expect when Cum-Ex cases are opened in the US

With Cum-Ex investigations now involving more countries, Rahman Ravelli wrote an article alongside Howard Fischer, Partner at New York-based Moses and Slinger, examining the likelihood of cases being brought in the US.

Rahman Ravelli and Howard's article, “Europe’s Cum-Ex Scandal – What to Expect When US Authorities Join the Party’’, was published by the New York Law Journal.

The article gives a summary of events so far in the share-selling tax scandal. It explains how shares were traded in a way that enabled more than one party to claim tax rebates – and how those rebates cost the treasuries of some countries billions of euros.

Rahman Ravelli and their co-author Howard Fischer make comparisons between Cum-Ex and the US practice of American depositary receipts (ADRs), which is a similar dividend arbitrage scheme. The US Securities and Exchange Commission (SEC) has concluded settlements totalling more than $450 million relating to ADRs.

Rahman Ravelli believes the SEC will be aggressive in pursuing those it believes are responsible for Cum-Ex, via criminal investigations and civil enforcement. According to them, the ADR cases show that the US authorities can and will pursue cases against cross-border transactions that result in lost tax revenue to foreign governments. 

The article concludes by explaining the reasons why the US could be set for increasing numbers of Cum-Ex cases.

The article was featured on the New York Law Journal. (Subscription required)