Two former bankers were convicted in Germany over their roles in striking Cum-Ex deals by Fortis Bank, causing €45 million ($52.7 million) of damage to the country's taxpayers.
The Frankfurt Regional Court sentenced Thomas S. to two years and seven months while Peter H. was sentenced to two years and six months for their crimes. Under German media law, the men can't be fully identified.
"You didn't care about the amount of damage you caused, you just wanted to make as much money as possible," Judge Eva-Marie Distler said on Friday. "Pure greed drove you to do this, which is punishable by law and morally despicable."
The pair worked at Gibraltar-based Global Arbitrage Partners Fund Ltd. which acted as a short seller in the Fortis deals in 2008 and 2009. Both men had confessed to the allegations at the start of the trial, with Thomas S. saying that he had let himself "be bought."
The court also seized €260,000 from Thomas S., profits he made while working at the fund. Before trial, he has already deposited €1.4 million to be returned to government coffers. The judges seized €629,000 from from Peter H., 60, who previously paid €500,000.
Lawyers for both men declined to comment.
The case is part of a wider probe. Ex-Fortis banker Frank H., who ran the lender's Frankfurt branch and orchestrated the trades, was
ABN Amro NV, which later took over the part of Fortis that carried out the trades, has returned the illicit proceeds to German tax authorities.
In Cum-Ex, traders exploited the way dividend tax was collected so that multiple investors could claim refunds on a tax that was only paid once. Scores of European and American banks participated at various levels, and by the time Germany stopped the trades in 2012, the practice may have cost the country as much as €10 billion.
In his confession at trial, Thomas S. told the judges that the longer the trades continued, the more his sense of guilt grew. When GAP stopped them after a regulatory change in 2009, he said he felt relief. It wasn't until some 10 years later that investigators raided his home in 2019.