Nomura Holdings Inc. is the latest bank to be caught up in the massive German investigation into the Cum-Ex tax dividend scandal. On Thursday, prosecutors raided Nomura's offices in Frankfurt as part of the probe into the illegal trading strategy that saw billions of euros in government revenue siphoned off via tax laws that allowed multiple investors to claim refunds of a tax on dividends that was paid only once. As many as 37 current or former employees of an Asian lender, who have not been identified, are being investigated by prosecutors in Cologne as part of the Cum-Ex scandal.
The scandal has been ongoing for over a decade, and prosecutors in Cologne are currently investigating around 1,600 people. They have been ramping up pressure on international banks in recent months, with BNP Paribas SA, Bank of America Corp.'s Merrill Lynch, and Barclays Plc among the institutions targeted.
Nomura has been on the radar of Cologne prosecutors for some time. The bank was mentioned in a warrant obtained in 2019 to raid Deutsche Boerse AG's Clearstream unit. The warrant revealed that Nomura had been involved in the deals for years in various roles, including as a short seller or a buyer.
A German spokesperson for Nomura confirmed that the company is cooperating with prosecutors in connection with the investigation into historic transactions in German stock around the dividend record date. The bank is just the latest to be ensnared in the Cum-Ex scandal, which continues to rock the financial industry.