In a historic move for German legal history, five former top managers of Deutsche Pfandbriefbank have been charged for profiting from Cum-Cum stock transactions.

The Frankfurt Higher Regional Court has approved these charges, marking a significant development in the ongoing scrutiny of financial misconduct.

These Cum-Cum transactions have reportedly cost the German state an estimated 28 billion euros, highlighting the scale of the alleged financial wrongdoing.

Initially, in February 2024, the Wiesbaden District Court rejected the prosecution's charges, but the Frankfurt Higher Regional Court later intervened, allowing the case to proceed.

As of now, the trial date in Wiesbaden has not been set, and further details about the defendants remain undisclosed.

Financial expert Christoph Spengel estimates that the tax damage from these deals is around 28.5 billion euros, with only a small fraction recovered by the German government.

Cum-Cum transactions are viewed as a more extensive and prevalent form of tax evasion compared to the notorious Cum-Ex deals, which have also defrauded the state of significant amounts.

These transactions exploited a loophole in German tax law, providing illegal tax advantages to foreign holders of German stocks while denying similar benefits to domestic investors.

A survey by the financial supervisory authority BaFin revealed that 54 banks acknowledged their participation in Cum-Cum transactions, with financial liabilities from these dealings exceeding 4.6 billion euros.

Legal experts suggest that this case could set a precedent for future prosecutions related to similar financial misconduct, potentially leading to broader implications.

While Deutsche Pfandbriefbank has undergone changes and operates today as pbb Deutsche Pfandbriefbank, the current institution disclaims any involvement in the past transactions.

The case is currently pending in the Third Criminal Chamber of the Wiesbaden District Court, where the accused are facing serious allegations.