HSBC agrees to a €267.5 million fine to settle French claims over alleged dividend tax fraud, part of a wider investigation into several major banks.
PARIS: British-based bank HSBC has agreed to pay a €267.5 million fine to settle French claims over alleged dividend tax fraud.
The deal with French financial prosecutors was approved by a judge at a Paris court on Thursday.
This settlement allows the bank to avoid further prosecution in the case.
The investigation is part of a wider inquiry into several large banks over a practice known as “CumCum” fraud.
This scheme involves an investor selling shares just before a dividend payment to avoid taxes, then immediately repurchasing them.
Banks are suspected of acting as intermediaries and charging commissions for these transactions.
“HSBC acknowledges the facts as they have been presented,” the bank’s representative said during the hearing.
HSBC later welcomed the deal, which it said recognises its cooperation and corrective measures.
The case stems from a massive fraud revealed by a consortium of European news outlets in 2018.
French financial prosecutors launched inquiries into six banks in December 2021.
These include HSBC, a Credit Agricole unit, BNP Paribas and its Exane unit, Societe Generale and Natixis.
Credit Agricole’s investment bank was the first to settle, agreeing to pay €88 million in September.
The fraud is similar to the “Cum-ex” scheme exposed in Germany.
In 2022, a German court sentenced a lawyer believed to be the mastermind of that scheme to eight years in prison.
The “Cum-ex” fraud reportedly siphoned off €140 billion over two decades.
