Convicted hedge fund trader wins cut in prison term in tax scandal case

A hedge fund trader convicted of fraud over sham Cum-Ex trades in a massive scandal that cost Denmark’s treasury a total of 12.7 billion kroner ($1.8 billion) had his prison sentence reduced by a Danish appeals court.

Guenther Klar, who was originally handed six years in prison, had his Danish sentence reduced to three-and-a-half years, according to a statement by the court. It was shortened because a Belgian court sentenced him to four years over similar crimes. Klar will serve the Belgian sentence after the Danish. 

The 55-year-old British trader was last year found guilty of swindling the Danish state out of 320 million kroner between 2012 and 2015 through dividend tax refund applications based on fictitious stock trades run by his company.

Cum-Ex was a controversial trading strategy in which a global network of bankers, lawyers and agents exploited loopholes on dividend payouts across multiple European countries to reap duplicate tax refunds.

Klar, who previously worked for Sanjay Shah’s Solo Capital hedge fund, was first extradited from the U.K. to Belgium to stand trial there before being sent to Denmark in 2023.

Shah, dubbed the mastermind of the scam in Denmark, was sentenced to 12 years in prison by Danish judges in December, the heaviest jail term handed down so far in Europe’s sprawling Cum-Ex trading scandal.