was fined €101 million (US$117 million) by the
over
and deliberately filing
.
The fines for carrying out Cum-Cum trades were imposed on two Morgan Stanley companies in London and Amsterdam, according to a statement by the Dutch public prosecution service on Thursday. Cum-Cum trades allowed foreign owners of stocks to
by lending the securities during dividend season to an exempt entity such as a local bank.
Morgan Stanley “through a specially designed structure, ensured that parties who were not entitled to a dividend tax offset or refund could still wrongly benefit from a portion of the offset dividend tax,” the prosecutor said.
The fine is
that Morgan Stanley paid to Dutch authorities at the end of 2024.
Under Dutch law,
are entitled to the right to offset dividend tax if they are the ultimate beneficiaries of those dividends. The prosecution service said that Morgan Stanley established a Dutch company that acquired shares between 2007 and 2012, but held them only briefly around dividend dates, receiving a total of €830 million during these short-term holding periods.
The firm offset the dividend tax withheld on these shares, totalling €124 million, in five corporate income tax returns between 2009 and 2013, it said.
The bank is “pleased to have resolved this historical matter, which related to corporate tax returns filed in the Netherlands over 12 years ago,” a Morgan Stanley spokesperson said. The bank had previously rejected the allegations.
Prosecutors across Europe have focused on Cum-Cum trades that enabled banks to secure hundreds of millions in dividend payments that some countries have deemed illegal. In France, prosecutors started a criminal probe into BNP Paribas SA, HSBC Holdings PLC’s local unit as well as Societe Generale SA and Natixis SA.
On the civil side, French tax officials are seeking to reclaim at least €4.5 billion in lost revenue and have expanded their focus to also audit Wall Street banks, including Goldman Sachs Group Inc. and Bank of America Corp.
While banks have been targeted by authorities, foreign institutional investors such as asset managers or hedge funds on the other side of some of these transactions appear to have been spared so far.
—With assistance from Patrick Van Oosterom.