Credit Agricole SA’s (CAGR.PA), opens new tab investment banking arm will pay about 88.2 million euros ($103 million) to settle a criminal investigation into dividend-arbitrage trades allegedly used to avoid French withholding taxes, a Paris judge said on Monday. Judge Peimane Ghaleh Marzban approved the deal at a public hearing, allowing Credit Agricole Corporate and Investment Bank (CACIB) to end the case without admitting guilt. The investigation focused on so-called cum-cum trades, where banks briefly held shares on behalf of foreign investors around dividend dates, allowing those investors to reclaim or avoid French dividend taxes. A statement from CACIB emphasised that the settlement does not constitute a criminal conviction and that CACIB did not knowingly encourage its foreign clients to engage in securities lending and borrowing or securities derivatives transactions for the purpose of tax evasion. Prosecutors said their investigation covered the 2013–2021 period and about 2,500 transactions that generated 50 million euros in profit for the bank. They accused CACIB of routinely facilitating such deals, arguing that the short-term share transfers lacked economic purpose and amounted to tax fraud. Prosecutors accepted that the lender did not run an aggressive sales campaign to promote the trades but said the bank habitually enabled transactions aimed at tax avoidance. The bank acknowledged the facts, cooperated through a two-year investigation and settled related tax claims. CACIB’s general counsel, Bruno Fontaine, said the bank recognised the conduct underpinning the allegations. In France, companies suspected of financial misconduct such as corruption or tax fraud can negotiate a judicial settlement to avoid trial. The agreements, subject to court approval, generally involve a fine and compliance commitments without admission of guilt or a criminal conviction.
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