German Fraud Trial hears Trader’s Journey from Floor to Jet-set

German Fraud Trial hears Trader’s Journey from Floor to Jet-set

A British banker told Germany’s biggest fraud trial this week how he worked his way from the office clerk to jet-setting trader before his dream career came to an early end.

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Nicholas Diable, 38, is one of two British bankers who
German prosecutors allege orchestrated a sham trading scheme to
make illegitimate double tax reclaims of more than 450 million
euros ($495 million).

Diable, who has not denied he was involved in the ‘cum-ex’
trading but says he had no reason to believe it was illegal,
played down his role during the court hearing in Bonn.

He described his work as that of a salaried technician with
a focus on getting trades done rather than a mastermind.

“For me, it was only a question of whether the trade was
possible or not,” Diable told the German judges on Wednesday.

State prosecutor Anne Brorhilker this month outlined
criminal charges against Diable and Martin Shields, who both
face a possible jail term as well as a court order to repay
the money they earned from the trades if found guilty.

Diable answered the accusation at his trial, the first
a criminal case brought against those involved in ‘cum-ex’
trading, a practice described by German finance minister Olaf
Scholz as a “scandal”.

Prosecutors allege that players in the scheme misled the
state into thinking a stock had multiple owners who were each
owed a dividend and a tax credit. Germany estimates such trades
cost it more than 5 billion euros in total.

If successful, this case would make it easier to pursue
others and recover the money lost.

Brorhilker said the two men had targeted companies including
carmaker BMW and airline Lufthansa, outlining more than 30
instances of double-tax reclaim totaling 447 million euros.

Shields told the court last week that he regretted his
involvement in the “industrial-scale” trading scheme, but that
the practice was common knowledge and that he had no reason to
believe at the time that it was legally questionable.

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The 41-year-old Oxford University graduate said the trading
thrived between 2005 and 2012, as investors from around the
globe made multi-billion-euro trades on German companies.

Diable emphasized his more technical, junior role, telling
judges about his modest start in the City of London, inputting
data, taking lunch orders and rituals such as running through an
office as colleagues threw objects at him.

He later became a trader and worked with Shields at German
bank HVB, carrying out such trades, before following him to
Gibraltar, when Shields set up his own company.

Both jobs involved entertaining customers and contacts in
“bars and restaurants” in London, at Germany’s Oktoberfest beer
the festival, as well as in Gibraltar, Diable said.

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Diable said he had been under investigation since he was 31
during a statement made to the court over two days outlining the
mechanics of the trading.

The alleged scheme involved trading shares rapidly around a
syndicate of banks, investors and hedge funds to give the
the impression of numerous owners, each entitled to a tax rebate.

The case, Germany’s biggest post-war fraud investigation, is
being closely followed in London and Frankfurt, where much of
the trading was organized, according to bankers and court
documents.

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