Santander 'Cooperating' With German Authorities in Investigation

   By Pietro Lombardi

Banco Santander S.A. (SAN.MC) is "fully cooperating with German authorities," the Spanish bank said Thursday after media reports that German prosecutors are looking at the bank's role in an alleged tax-evasion scheme.

The alleged evasion took place through an arbitrage strategy known as "cum/ex" or "dividend stripping," which involves transactions using shares that pay dividends.

The bank said it is also conducting an internal investigation.

"Our current understanding is that the primary focus of the investigation relates to certain activities extending from 2007 to 2011 of three former employees who left our group a number of years ago," it said.

German tax authorities in 2011 closed loopholes around the practice of dividend stripping.

Spain's largest bank has so far found no evidence senior management was involved in such activities or that the governing bodies of Santander or its subsidiaries had any knowledge of the activities, it said.

"Banco Santander doesn't tolerate behavior that does not comply with the rules, laws and standards applicable in the markets in which we operate and if our investigations do identify misconduct we will take the appropriate action," it said.

Write to Pietro Lombardi at pietro.lombardi@dowjones.com

(END) Dow Jones Newswires

October 18, 2018 08:09 ET (12:09 GMT)

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