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Authorities stated banks, together with Societe Generale, BNP Paribas and HSBC, confronted a compensation request of greater than $1bn.
French authorities have searched the Paris places of work of 5 banks, together with Societe Generale, BNP Paribas and HSBC, on suspicion of fiscal fraud, a part of a broad European probe into the dodging of dividend tax funds.
The French prosecutors’ actions on Tuesday are the most recent to hit international banks over the dividend tax fraud scheme as related investigations have been carried out in Germany and different European nations.
The Nationwide Monetary Prosecutor’s Workplace (PNF) stated in an announcement the probe was linked to so-called “cum-ex” dividend stripping, a buying and selling scheme whereby banks and traders swiftly commerce shares of firms round their dividend payout day. The observe goals to blur inventory possession and permit a number of events to illegally declare tax rebates on dividends.
Societe Generale and BNP Paribas confirmed the searches, declining additional remark. The PNF, confirming an earlier report in Le Monde newspaper, stated Tuesday’s searches had additionally focused Exane, which is a part of BNP Paribas, and Natixis, the funding financial institution arm of French banking group BPCE.
A French monetary prosecution workplace spokesperson stated it was unattainable to place an actual determine on the size of the fraud however stated the banks collectively confronted an total compensation request of greater than $1bn, together with fines and late curiosity funds.
The oldest case being investigated dates again to 2014, and it was not attainable to say when the observe had ended.
In December, a German courtroom sentenced tax lawyer Hanno Berger to eight years in jail after he was alleged to have masterminded one of many nation’s greatest post-war frauds by way of a dividend-stripping scheme that some estimates stated value German taxpayers round 10 billion euros ($10.7bn).
It was the highest-profile prosecution and longest sentence to this point in a collection of trials which have additionally convicted British bankers.
“The continuing operations, which have required a number of months of preparation, are being carried out by 16 investigating judges and over 150 investigation brokers,” the PNF stated in its assertion. It stated six German prosecutors have been additionally aiding the investigations.
The searches come as the worldwide banking sector is in turmoil following this month’s collapse in the US of Silicon Valley Financial institution and Signature Financial institution, and the government-orchestrated takeover of Credit score Suisse by rival UBS.
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