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Oct 18 2018 03:26am
https://cumex-files.com/en/

This cross-border effort of investigative journalists (including my favourite Dutch investigative journalism team, FTM), have uncovered that more than €55 bn has been removed from EU state coffers by dodging taxation (most of it just being unethical, and some of it being illegal).

Quote
€31.8 billion. This is how much a network of equity traders, tax advisors, bankers, lawyers and investors has removed, many including prosecutors say stolen, from the German state’s tax coffers, said a team of eight journalists from Panorama and newspaper Die Zeit after analysing data leaked to them on a UBS drive.

Cum-ex – this is the name German media have given to this scam. Internationally the different variants of these trades are known as dividend arbitrage.

Cum-ex and its variant cum-cum were highly complex share deals with no economic purpose other than to receive tax ‘reimbursements’ from the state – but for tax that had never in fact been paid. This is how it went. The participants would lend each other shares of major corporations, creating the appearance for the tax authorities that there were two owners of the shares when in fact there was only one. The bank which settled the trades would then issue a ‘confirmation’ to the investor that tax on dividend payment had been paid to the tax office – when in fact it had not. With this confirmation in hand, the investors were then ‘reimbursed’ by the state. It’s a bit like parents claiming child benefit for two – or more – children when there is only one child in the family.

The federal German government only called a stop to the practice in 2012 by making adjustments to the tax code, then making another adjustment in 2016 after one variant of the trade had continued. Its response had been so slow that a parliamentary inquiry was set up. Some critics think the finance ministry was fully aware of cum-ex all along but hesitated to close it down as it was one of the few profitable business lines of banks after the 2008 financial crisis.

Either way, cum-ex has been one of Germany’s biggest scandals in recent years, involving virtually the entire banking sector and many high-profile individuals and companies. But strangely it has gone largely unnoticed outside of Europe’s biggest economy.

What drives the traders and bankers behind this scandal? So far none of them has broken their silence. Schröm and Salewski wanted to know how far they went – and what they might be up to next.

Capital markets are global, trades cross borders in milliseconds. It is simply impossible for a single country’s media to investigate what’s happening. To overcome national barriers, CORRECTIV decided a year ago to coordinate a team of journalists from twelve European countries. 38 journalists have followed the traces that cum-ex, cum-cum and similar trades have left across Europe.


I highly recommend reading this. It's both written well and quite detailed. It also shows that investigative journalism is still very much alive, if you know where to look.

Other saucy bit:

Quote
Frey says that German tax law has grown so complex that those who have written the laws no longer understand it themselves. If changes need to be made, law-makers rely on the tax advisory industry.


Lawmakers are advised by those who profit off the laws.

This post was edited by balrog66 on Oct 18 2018 03:28am
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Oct 18 2018 03:37am
Quote (balrog66 @ Oct 18 2018 08:26pm)
https://cumex-files.com/en/

This cross-border effort of investigative journalists (including my favourite Dutch investigative journalism team, FTM), have uncovered that more than €55 bn has been removed from EU state coffers by dodging taxation (most of it just being unethical, and some of it being illegal).



I highly recommend reading this. It's both written well and quite detailed. It also shows that investigative journalism is still very much alive, if you know where to look.

Other saucy bit:



Lawmakers are advised by those who profit off the laws.


One Australian bank got caught for 330,000 money laundering charges.
Nothing will happen to any of them.
We caught a bank giving bad financial advice and fined them 16 million, estimated profit from the scam was 40 million.

This post was edited by Plaguefear on Oct 18 2018 03:40am
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Oct 18 2018 03:47am
Quote (Plaguefear @ Oct 18 2018 09:37am)
One Australian bank got caught for 330,000 money laundering charges.
Nothing will happen to any of them.
We caught a bank giving bad financial advice and fined them 16 million, estimated profit from the scam was 40 million.


Accountability is something that desparately needs to be introduced into the financial sector. Anyone who is responsible as an executive during those fraudulent times or anyone who is caught performing these acts should be on a blacklist for any involvement in finance. They simply cannot be entrusted to do their job ethically.

If someone commits massive HIPAA violations, you lose your license to practice medicine. If you do shady stuff as a lawyer you get disbarred. Registered sex offenders aren't allowed in kindergartens.
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Oct 18 2018 06:57am
Quote (balrog66 @ Oct 18 2018 08:47pm)
Accountability is something that desparately needs to be introduced into the financial sector. Anyone who is responsible as an executive during those fraudulent times or anyone who is caught performing these acts should be on a blacklist for any involvement in finance. They simply cannot be entrusted to do their job ethically.

If someone commits massive HIPAA violations, you lose your license to practice medicine. If you do shady stuff as a lawyer you get disbarred. Registered sex offenders aren't allowed in kindergartens.


Add asset seizures.
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Oct 18 2018 07:52am
Quote (Plaguefear @ Oct 18 2018 03:37am)
One Australian bank got caught for 330,000 money laundering charges.
Nothing will happen to any of them.
We caught a bank giving bad financial advice and fined them 16 million, estimated profit from the scam was 40 million.


YUP sounds like the bank crashes from the housing crisis and the eventual bailouts here. Banks make a shit load of cash, get caught, get fined a small % of the cash, then when the bottom drops out they get more cash, and the CEOs and board take a large % of that cash.

I get that banks themselves may be "too big to fail" but that doesnt mean you can't toss the CEO into prison for 5-10 years to send a message about predatory practices. all of this shit is top down and approved by CEOs and boards.
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Oct 18 2018 07:59am
Quote (thesnipa @ Oct 19 2018 12:52am)
YUP sounds like the bank crashes from the housing crisis and the eventual bailouts here. Banks make a shit load of cash, get caught, get fined a small % of the cash, then when the bottom drops out they get more cash, and the CEOs and board take a large % of that cash.

I get that banks themselves may be "too big to fail" but that doesnt mean you can't toss the CEO into prison for 5-10 years to send a message about predatory practices. all of this shit is top down and approved by CEOs and boards.


Too big to fail, sure, too big to be seized by the state? No.
Fire the board, hire a board take public ownership.
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Oct 18 2018 08:00am
Quote (thesnipa @ 18 Oct 2018 09:52)
YUP sounds like the bank crashes from the housing crisis and the eventual bailouts here. Banks make a shit load of cash, get caught, get fined a small % of the cash, then when the bottom drops out they get more cash, and the CEOs and board take a large % of that cash.

I get that banks themselves may be "too big to fail" but that doesnt mean you can't toss the CEO into prison for 5-10 years to send a message about predatory practices. all of this shit is top down and approved by CEOs and boards.

yep but we know that doesnt happen. it would just be next man/woman/xir up anyways to ensure “continuity of service”
instead once they’re done they either go sit on the boards of their former “competitors” or worse take up important govt positions (like henry paulson or larry summers)
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Oct 18 2018 08:06am
Quote (excellence @ Oct 18 2018 08:00am)
yep but we know that doesnt happen. it would just be next man/woman/xir up anyways to ensure “continuity of service”
instead once they’re done they either go sit on the boards of their former “competitors” or worse take up important govt positions (like henry paulson or larry summers)


agreed, but still think it sends a better message to take the job of a guy in an orange jump suit than a guy sitting on a yacht snorting blow off a hookers ass. not that it would change all that much, most people would sell their mother to ISIS for a few hundred million.
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Oct 18 2018 08:08am
This is on a much larger scale than I have examples for but for instance in Canada during most fiscal 2017s TOSI was introduced.

Well before the legislation is passed to alter the income tax act presentations were being made on the most advantageous way around it.

Do you know who you get on the phone when you call CRA?

A junior representative. They know virtually nothing about tax. They just escalate none basic questions. The next level consists of slightly smarter junior staff and the tax investigation group is made of failed CPAS that couldn't make bigger money in the private sector or those who wanted a 9 to 5 and a government pension.

The OAG is really no better.
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Oct 18 2018 10:33am
It's about $150 billion in the U.S. from tax shelters alone.
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