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UK Fines Eighth London Broker Over Sanjay Shah’s Tax Trades
UK authorities completed their eighth investigation into Cum-Ex trades, fining a London brokerage firm £1.6 million ($2 million) for its involvement in executing the notorious tax deals that have cost European treasuries billions of euros.
(Bloomberg) -- UK authorities completed their eighth investigation into Cum-Ex trades, fining a London brokerage firm £1.6 million ($2 million) for its involvement in executing the notorious tax deals that have cost European treasuries billions of euros.
Mako Financial Markets Partnership LLP was hit with the penalty for trading £68.6 billion in Danish equities and £23.6 billion in Belgian stocks on behalf of hedge fund chief Sanjay Shah’s Solo Group. The penalty takes the total number of fines to more than £30 million and marks the end of the UK investigations, the Financial Conduct Authority said Tuesday.
“Mako failed to spot clear red flags and facilitated highly suspicious trading that made it vulnerable to being used to support financial crime,” said Therese Chambers, the FCA’s joint executive director of enforcement and market oversight.
Shah became the face of the sprawling Cum-Ex scandal, which authorities say cost European taxpayers billions of dollars in lost revenue through illicit trades targeting taxes on dividends. He’s been sentenced to 12 years in jail by Danish authorities and is separately being pursued by German criminal prosecutors. The FCA’s investigations meanwhile focused on the interdealer brokers, or IDBs, that offered their help.
Mako accepted the findings and qualified for a 30% discount.
The fine relates to a business that was closed almost 10 years ago,” Trystan Schauer, Mako chief executive officer, said in an emailed statement.
Mako now focuses on proprietary trading — or making market bets with its own capital — and is no longer involved in arranging trades for clients, Schauer said. Still, the firm has bolstered its systems to “prevent a recurrence” of the Cum-Ex trades, he said.
--With assistance from Donal Griffin.
More stories like this are available on bloomberg.com
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First Published:18 Feb 2025, 05:11 PM IST
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