Verdict for Kai-Uwe Steck in Cum-ex Fraud Case: Suspended Sentence and Asset Seizure
Royal Figure Implicated in Cum-Ex Scandal Shines In Public Eye
Breaking Down the Case
The Bonn Regional Court recently handed down a verdict in the Cum-ex tax fraud case involving Kai-Uwe Steck, a capital market law specialist with a penchant for tax and financial products. Steck was sentenced to a one-year and ten-month suspended sentence for aggravated tax evasion across five cases. The court, presided over by Sebastian Hausen, also ordered the seizure of assets worth €23.6 million (Case No.: 62 KLS 1/24).
While Steck's contribution as a key witness in the investigation was substantial, the court decided to suspend his sentence due to a variety of factors.
A Closer Look at Kai-Uwe Steck
Born on October 9, 1971, Steck embarked on his legal journey by studying law at the University of Osnabrück from 1992 to 1997. Following this, he pursued a Ph.D., focusing on the regulation of investment funds in U.S. law, from 1997 to 1999[1].
Steck and the Cum-ex Scandal
From 2007 to 2015, Steck was deeply entrenched in Cum-ex transactions, also known as Dividendenstripping. These transactions, later deemed tax evasion by the German Federal Court, involved buying shares just before the dividend payment date and selling them afterwards, enabling investors to claim multiple refunds of capital gains tax. By doing so, they defrauded the state[1][5].
Legal Ramifications
In 2025, Steck faced the consequences of his actions, receiving a one-year and ten-month prison sentence, suspended on probation, for five counts of serious tax evasion. The court also ordered the confiscation of approximately €24 million. His role as a key witness in the case contributed to a reduced sentence[4][5]. This instance underlines the importance of cooperating with authorities in tax fraud cases.
Persisting Controversies
Cum-ex transactions capitalized on a loophole in the tax system, allowing for multiple claims of the same tax refund. Although German courts ruled these transactions illegal, experts acknowledge that they may still persist in contemporary financial dealings[5].
Involved in Cum-ex transactions, which were later deemed tax evasion by the German Federal Court, Kai-Uwe Steck's activities took place within the framework of the finance, banking-and-insurance industry from 2007 to 2015. Despite being sentenced for his involvement, Steck also played a significant role as a key witness in the investigation, which has implications for the industry's regulation and compliance within the context of finance and banking-and-insurance.
