Rahman Ravelli explain the matters at the heart of Cum-Ex investigations

In an article published by The Banker, Rahman Ravelli details the issues developing in investigations relating to the share-selling practice Cum-Ex.

The piece starts by considering the cases of Anthony Patterson, a former trader who is to be extradited to Denmark over his involvement in Cum-Ex. He faces a fraud trial in Denmark alongside his former boss Sanjay Shah, with both of them accused of Cum-Ex activities that saw millions taken out of Danish state funds.

Rahman Ravelli explain that Cum-Ex involved shares being traded in a way that disguised the identity of their owner so that more than one party could claim rebates on capital gains tax, even though that tax had only been paid once, at most. The authorities in various countries eventually became aware of the tactic, with many states now conducting Cum-Ex investigations.

Rahman Ravelli emphasise that Anthony Patterson’s case should not be viewed in isolation. Many financial institutions – and some of those who worked or still work for them – are having to reassess their behaviour. With countries looking to recoup their Cum-Ex losses and hold to account those they blame for those losses, the consequences could be huge for organisations and individuals.

This, Rahman Ravelli says, means that many will need to monitor developments, take appropriate advice at the earliest possible opportunity in order to determine the best course of action, and take all steps necessary to identify and put right any problems. A ‘head in the sand’ approach would be dangerous.

With an unspecified number of individuals and organisations set to face Cum-Ex investigations, many will need to act now to minimise the fall-out that may be coming.

Rahman Ravelli's article featured in The Banker. (Subscription required)