Ex-banker faces €14M bill in German tax scandal

An ex-London investment banker, convicted in the first German trial over illegal Cum-Ex trades, must now pay a €14 million ($15.3 million) bill a court imposed on him more than four years ago. 

Martin Shields, who was spared prison time in 2020 because of his extensive cooperation with prosecutors, will now be asked to pay another €11 million, according to a Bonn Prosecutors’ spokesman. Shields had already paid about €3 million during his trial.  

Shields has always said he wanted to pay the back the money and he will now do so, a spokesman for the ex-banker said. The only open issue was which government entity should receive it and that was now cleared by the Cologne court, he added.

In Cum-Ex deals shares rapidly changed hands to earn duplicate refunds on dividend tax. Lawmakers estimate that the scheme may have cost taxpayers more than €10 billion by the time Germany revised the rules in 2012 to close down the practice.

The decision comes after years of legal wrangling that almost looked as if Shields could dodge the bill. As part of his verdict the Bonn court seized €176 million from M.M. Warburg Group whose deals were at the center of the case. 

Germany’s top criminal court in its 2021 landmark judgment over his case indicated that the government can’t double dip. But various courts and tax authorities have since then taken different views. After a Cologne appeals court last month said enforcement against Shields isn’t principally barred, Bonn prosecutors decided they now want the money.