Bloomberg Tax
Free Newsletter Sign Up
Bloomberg Tax
Advanced Search Go
Free Newsletter Sign Up

Freshfields Lawyer Arrested in Germany’s Cum-Ex Tax Probe (1)

Nov. 27, 2019, 6:36 PMUpdated: Nov. 29, 2019, 2:01 PM

Frankfurt prosecutors arrested a lawyer who until a few weeks ago was a partner at Freshfields Bruckhaus Deringer LLP as part of a probe of controversial tax deals that cost Germany billions of euros.

One of two attorneys under investigation in one of the country’s Cum-Ex tax probes was arrested Friday because he is a flight risk, a spokesperson for the prosecutors said without identifying him or the law firm. People familiar with the probe have said that the lawyer is Ulf Johannemann, the former head of global tax at Freshfields. He has left the firm.

Werner Leitner, Johannemann’s defense attorney, said the arrest was “totally unfounded” and that he will challenge it in court. A spokesman for Freshfields declined to comment.

Read more: More Bankers Face Cum-Ex Charges as German Tax Scandal Widens

The arrest is the first in the country’s Cum-Ex investigation. The scandal has roiled several financial institutions as prosecutors allege bankers helped investors reap billions of euros in improper tax refunds from a loophole on dividend payments. In Bonn, two former bankers are on trial for helping to organize deals that led to more than 400 million euros ($440 million) in lost taxes. Investment banks relied on the clearance of attorneys to participate in Cum-Ex, and now the banks are using the lawyers’ legal advice as a central defense argument.

Johannemann and another lawyer at Freshfields have been under investigation for at least a year. The probe concerns Freshfields’ work for the German unit of Canadian bank Maple Financial Group Inc., according to the people. The unit was later closed by German financial regulator Bafin as a result of the Cum-Ex investigation. Johannemann is among the group of people whom Frankfurt prosecutors are going to charge within weeks, the people have said.

Freshfields advised many banks and other participants in the financial markets on Cum-Ex transactions. The law firm’s role was mentioned on several occasions in the Bonn trial. Martin Shields, one of the two accused, on Wednesday cited opinions authorized by Johannemann that certified the transactions were legal.

The Frankfurt offices of the law firm were raided three times over the last two years. Freshfields has previously commented that the firmwas “confident that the advice we provided was legally sound.”

To contact the reporters on this story:
Karin Matussek in Berlin at;
Nicholas Comfort in Frankfurt at

To contact the editors responsible for this story:
Anthony Aarons at

Christopher Elser

© 2019 Bloomberg L.P. All rights reserved. Used with permission.

(Updates with raids in last paragraph.)