Off The Wire
JPMorgan's Frankfurt office searched as part of German probe
LONDON, Aug 31 (Reuters) - German authorities have searched the Frankfurt offices of JPMorgan Chase & Co (JPM.N), a bank spokesperson confirmed, as long-running investigations into one of the country's biggest financial scandals affected another global lending giant.
The share-trading scandal known as "cum-ex", which has blighted German political and financial circles for several years, has cost taxpayers billions of euros, lawmakers claim.
A large number of banks have been searched by prosecutors investigating possible wrongdoing, with raids being conducted on the German branches of Barclays (BARC.L), Bank of America and Morgan Stanley in recent months.
Government officials say the investigation involves some 100 banks on four continents and at least 1,000 suspects.
"We can confirm that our Frankfurt offices were visited this week. We continue to cooperate with the German authorities on their ongoing investigation," a JPMorgan spokesperson told Reuters in an emailed statement.
Prosecutors in Cologne have been especially aggressive in pursuing the case. A representative told Reuters earlier this month it was currently investigating 50 international and domestic financial institutions and brokers.
A spokesman for Cologne prosecutors confirmed to Bloomberg News, which first reported JPMorgan's involvement, that a search was taking place in Frankfurt but declined to identify the target.
Bankers and investors participating in the scheme, also known as dividend stripping, would swiftly trade shares of companies around their dividend payout day, blurring stock ownership and allowing multiple parties to falsely reclaim tax rebates on dividends.
In the first major criminal trial for the fraud, two British bankers were handed suspended jail terms, and one was given a 14-million-euro penalty in Germany two years ago.
Another banker, a former employee of M.M. Warburg group, part-owned by one of Germany's oldest banking dynasties, was handed a 3-1/2 year jail sentence in February for his part in the scandal.