German prosecutors search flats, offices over share-trading scam

BERLIN (Reuters) - Frankfurt prosecutors searched apartments and offices across Germany as part of a broader investigation into a fraudulent share-trading scheme, they said on Thursday.

The practice, known as cum-ex, involves cross-border trading of company shares around a syndicate of banks, investors and hedge funds to create the impression of numerous owners, with each entitled to a tax rebate.

There are seven suspects - six men and one woman - aged 46 to 55, the prosecution office said in a statement. The searches were conducted on Tuesday.

The investigation into the scheme began as far back as 2013. Prosecutors have said it misled the German government into paying tax refunds that have cost the country billions of euros.

The Frankfurt prosecutors said they searched apartments and offices in the states of Hesse, Lower Saxony, Baden-Wuerttemberg and Bavaria in connection with three cases in which cum-ex trades led to suspected tax reclaims of over 50 million euros ($56 million).

Around 170 tax investigation officials and 11 prosecutors were involved in the raids, the prosecutors said.