FRANKFURT May 22 Swiss bank J. Safra Sarasin
must pay German drug store entrepreneur Erwin Mueller around 45
million euros ($50.7 million) in compensation for incorrect
investment advice, a court in the German city of Ulm has ruled.
The Brazilian-owned bank had put Mueller's money into a fund
specialising in so-called cum-ex trades. The 84-year-old
businessman had said the bank did not properly advise him about
the risks involved.
Basel-based Sarasin said it was considering its options on
the ruling, which was announced on Monday, including a potential
appeal. It noted the case dated back to when it was majority
owned by another business.
Cum-ex trades focus on shares about to go ex-dividend and
can lead to a double repayment of capital gains taxes that in
fact were only paid once. The practice takes advantage of a
legal loophole and is no longer admissible.
Investors lost millions when the German finance ministry
halted the practice that experts calculated had cost the
treasury up to 12 billion euros.
The court ruled the bank had not informed Mueller fully of
commission rules and had assured him his investment was insured
against losses although this was not the case.
($1 = 0.8884 euros)
(Reporting by Ilona Wissenbach and Alexander Hübner; Writing by
Michael Shields; Editing by Mark Potter)