Barclays PLC, Commerzbank AG, Skandinaviska Enskilda Banken AB and TP Icap PLC were among banks identified by a banker who testified before a German court to explain how the so-called cum-ex tax fraud deals worked, Bloomberg News reported.
The banks and over half a dozen others acted as short sellers, share lenders, prime brokers and buyers on the illegal deals, which were done "on an industrial scale," banker Martin Shields reportedly told the court. Shields is acting as a key defendant to avoid long prison time, according to the Sept. 18 report.
Prosecutors reportedly raided Commerzbank offices early in September over the case, while SEB, in October 2018, denied any involvement in the fraud.
The German state has reportedly lost billions of euros because of the scheme, which involves trading shares rapidly to create the impression of numerous owners who are each entitled to tax refunds. The fraud has also dragged Germany's biggest lender, Deutsche Bank AG, France's Société Générale SA and U.S.-based Bank of New York Mellon Corp.
The trial for the case is expected to run until 2020.
