Financial Crime Spillovers: Evidence from Cum-Ex and Cum-Cum Trading
Published in Working Paper, 2023
This study focuses on a particular type of dividend stripping strategy employed by institutional investors to exploit regulatory tax loopholes in the European system. By examining the impact of national legal reforms, we demonstrate their effectiveness in curtailing these practices. However, an unintended consequence emerged as neighboring countries without similar legal protections experienced significant spillovers, leading to continued instances of cum-ex and cum-cum trading.
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