The lenders are suspected of helping investors avoid paying taxes on their dividends
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The Paris offices of five major banks were searched on Tuesday amid a probe into suspected money laundering and tax evasion related to dividend payments, several media outlets reported on Tuesday.
The raids in question took place at Societe Generale, BNP Paribas, Exane and Natixis offices, as well as those of British banking giant HSBC, according to Le Monde, which was the first to break the news.
Societe Generale confirmed the searches to Reuters, but abstained from further comments. The other four banks did not comment on the reports.
France’s National Financial Prosecutor’s Office (PNF) later confirmed reports of the raids in a statement, adding that the investigation was linked to the so-called “cum-cum” dividend strategy, a scheme where banks swiftly trade shares with foreign investors around their dividend payout time. The mechanism allows multiple parties to illegally avoid being taxed or reclaim tax rebates on dividends.
PNF said the ongoing probe, which was opened back in 2021, is being carried out by 16 investigating judges and over 150 agents. According to a Bloomberg report, the five banks face collective fines of more than €1 billion ($1.1 billion) in connection with the investigation.
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The searches came as yet another hit to the global banking industry, which is still reeling from bank failures in the US and the government-brokered rescue takeover of Switzerland’s Credit Suisse by rival UBS.
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