Court overturns judgment against Cum-Ex whistleblowers

Es is a success for the cum-ex-whistleblower Eckart Seith: The Zurich Higher Court has overturned and renewed an earlier sentence by the Zurich District Court against the German lawyer and two former employees of Bank J. Safra Sarasin for industrial espionage and offenses against Swiss banking laws The trial was rejected at the first instance.

The reason given by the Swiss judicial authorities was the bias of the investigating public prosecutor at the time. Much of the evidence presented by the prosecutors against Seith and the co-defendants was no longer usable. Now the Zurich Public Prosecutor’s Office and the court have to reopen the case “in order to repeat the unusable evidence taking”.

The defense had submitted five requests for bias in the year-long criminal proceedings without success, with the sixth request at the higher court. “My trust in the Zurich judiciary has been restored by the decision of the higher court,” said Eckart Seith in an interview with the FAZ

Unusual proximity to the bank

At the hearing on December 8th last year, the Zurich Higher Court criticized the prosecution’s evidence in the strongest possible terms. The appeal date originally scheduled for two days was canceled after just a few hours. The presiding judge Rolf Naef stated that he considered the then lead prosecutor Peter Giger to be biased because of his unusual proximity to Bank Sarasin.

This impression should also have continued on the subsequent public prosecutor. Naef overturned the earlier judgment with a decision dated December 17, which the higher court announced on Friday. On the 16 pages available to the FAZ, the chairman of the 1st criminal chamber goes tough with his fellow judge in the first instance as well as the Zurich public prosecutor responsible for economic crimes.

The “cum-ex” whistleblower Seith had pointed out irregularities at the private bank Sarasin (now J. Safra Sarasin) for years and provided German financial and law enforcement authorities with information. In Switzerland, too, there was a criminal complaint that had been with the public prosecutor in Zurich for a long time, but which in turn targeted the whistleblower after criminal complaints from the bank. “If a complaint remains unprocessed for years and the other complaint is pursued with vehemence, this can at least give the impression that the investigating public prosecutor has already sided with one party and is pursuing their point of view with much greater commitment,” writes Naef in his decision.

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According to Bank Sarasin reports, Giger “obviously had so much free capacity” that he even had houses in Germany searched. However, the prosecutor did not do anything to protect the interests of the other advertisers.

Much of the evidence cannot be used

Giger’s behavior also had a detrimental effect on his successor. Because, in the opinion of the higher court, his indictment and the evidence presented are largely based on Giger’s findings. They are therefore also not usable to the detriment of the accused, according to the decision. In addition to overturning the verdict, the court ordered the three defendants to receive more than 225,000 Swiss francs in compensation.

The progress of the criminal proceedings must now be determined by the district court, which negotiated the matter as early as 2019. It has to check whether the actual charge can be held on the basis of the thin evidence or whether the entire taking of evidence has to be repeated. The first instance can also refer the entire procedure back to the investigating authorities. “I don’t expect a negotiation to take place at all,” says Seith. “There is no longer any charge for this.”

High tax damage prevented

Bank Sarasin had carried out cum-ex transactions for investors such as the drugstore entrepreneur Erwin Müller through Luxembourg’s Sheridan funds. In 2013, two bank employees passed on internal documents to Seith, including an expert report by the law firm Freshfields Bruckhaus Deringer. For the Stuttgart attorney, this resulted in the fact that stock group transactions with short sales around the dividend date were illegal.

He shared this information with the Cologne Public Prosecutor’s Office so that the unjustified reimbursement of up to 460 million euros by the tax authorities could be stopped. There is now a charge of serious tax evasion against a senior employee of Bank Sarasin at the Bonn Regional Court. The Swiss banker has so far eluded the process.

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