In July 2026, prosecutors searched Deutsche Bank’s Frankfurt headquarters as part of an investigation into cum-cum transactions carried out by Postbank, now part of the Deutsche Bank group, between 2008 and 2010. Ten former Postbank executives are named as suspects. The bank itself is not the target of the investigation and has stated that it is cooperating fully with authorities.
The case is only the latest sign of a broader shift. For years, cum-cum transactions sat in a legal gray area: widely used, criticized by tax authorities, but rarely treated as a criminal matter in the way that cum-ex transactions were. A December 2024 court ruling changed that. German prosecutors and financial regulators are now actively examining cum-cum arrangements from a criminal, not only a tax, perspective, and foreign banks, asset managers, and individual executives who took part in this kind of trading are increasingly within reach of that scrutiny.
What Are Cum-Cum Transactions?
Cum-cum transactions typically involved the temporary transfer of shares in German companies to a domestic institution, usually a bank, around the date a dividend was paid. German tax residents can credit or reclaim the capital gains tax withheld on dividends against their final tax liability, an option that was largely unavailable to foreign shareholders. This asymmetry is what made cum-cum arrangements attractive, though German law has since introduced minimum holding-period requirements specifically to prevent such artificial transfers of ownership.
Cum-cum is often mentioned alongside cum-ex, the more widely known scandal involving multiple refunds of tax that had only been withheld once. The two are legally distinct. Cum-ex was designed to extract tax that was never paid in the first place, and German courts settled its criminal character some years ago. Cum-cum was aimed at placing foreign shareholders on the same tax footing as domestic ones, a narrower and, until recently, more contested question. That distinction is exactly why cum-cum was treated as a lesser concern for so long, both by tax authorities and in the public eye.
A Court Ruling That Changed the Picture
In December 2024, the Higher Regional Court of Frankfurt am Main confirmed for the first time that cum-cum structures can, in principle, constitute criminal tax evasion under Section 370 of the German Fiscal Code, rather than merely an impermissible tax arrangement. The ruling reversed an earlier decision by the Wiesbaden Regional Court and allowed criminal charges to proceed against several former bank executives.
Germany’s financial regulator, BaFin, has since stepped up its scrutiny, requiring supervised institutions to report on their historical exposure to cum-cum arrangements and to reach back further in time than in previous inquiries. Institutions responding to such requests face a genuine dilemma. The review itself can surface facts that create an obligation to correct past tax filings, or it may show that a voluntary self-disclosure is the more prudent course. At the same time, the review process creates a documented record that authorities may later request.
Why This Matters for Foreign Institutions and Individuals
A few features of this shift are worth understanding, whichever side of it you may be on.
Limitation periods run longer than they appear. Ordinary tax correction periods are short, but once a transaction is treated as tax evasion rather than a tax irregularity, criminal limitation periods of up to fifteen years can apply. This is why some current investigations and regulatory inquiries reach back well over a decade.
Personal exposure depends on role and knowledge, not seniority. Traders, compliance staff who relied on documentation prepared by others, board members who received only summaries, and external advisors instructed on narrow questions have all featured in cum-ex and cum-cum investigations. Whether any individual faces liability depends on what they actually knew and could control, which is why early, individual legal advice matters regardless of title.
Being based outside Germany does not remove exposure, though it does add complexity. Institutions and individuals abroad still need a reliable way to instruct German counsel, access the case file, and determine whether personal appearance in Germany will be required at any stage of the proceedings.
Have Legal Questions About Cum-Cum Exposure?
If your institution has received a regulatory inquiry, or you are an individual who played a role in cum-cum transactions in the past, the right time to seek advice is before you respond, not after. Schlun & Elseven Rechtsanwälte advises foreign financial institutions and individual executives on cum-cum-related exposures in Germany, from initial risk assessment through representation in regulatory inquiries and criminal proceedings. Our lawyers are available by phone, email, and video conference.
Schlun & Elseven: Legal Support in Cum-Cum Investigations
Our criminal tax lawyers advise clients on cum-cum exposure in Germany, drawing on the same team’s experience defending institutions and individuals in cum-ex proceedings, as well as in business criminal law more broadly. Our work in this area includes:
- assessing historical cum-cum and securities lending arrangements for tax and criminal exposure,
- representing institutions and individuals in regulatory inquiries and prosecutorial investigations,
- advising on correction filings and voluntary self-disclosure under German tax law,
- defending clients during searches, seizures, and asset freezing measures,
- coordinating with foreign counsel, compliance teams, and tax advisors across jurisdictions.
We advise international clients in English throughout, and coordinate directly with counsel and compliance functions abroad where a matter spans more than one jurisdiction. Contact us for an initial assessment of your situation.
An Overview: Frequently Asked Questions about Cum-Cum Investigations in Germany
Since 2015, Germany’s Federal Fiscal Court has held that many cum-cum structures do not meet the legal requirements for a tax refund. Since December 2024, a ruling of the Higher Regional Court of Frankfurt am Main has confirmed that such structures can also amount to criminal tax evasion, depending on the individual facts, including how ownership of the shares was structured and what those involved actually knew.
Ordinary tax correction periods are limited to a few years. Once a transaction is treated as tax evasion, however, extended criminal limitation periods of ten or, in serious cases, fifteen years can apply. This is why some current investigations and regulatory inquiries reach back well over a decade.
Yes. Liability depends on individual knowledge and control, not seniority or job title. Traders, compliance staff, board members, and external advisors have all been named as suspects in past cum-cum and cum-ex investigations, depending on their actual role.
Such an inquiry should be treated as both a regulatory and a criminal law matter. Institutions should review their historical transactions carefully, consider whether a correction of past filings or a voluntary self-disclosure is appropriate, and seek legal advice before responding.
Yes. We advise and represent foreign financial institutions and individuals in English throughout, and coordinate with foreign counsel, compliance teams, and tax advisors where a matter involves more than one jurisdiction.
