From DealBreaker, October 7:
Dubai’s nice and all, but kind of boring. Also he’d like his $500 million back.
Some years ago, a London trader named Sanjay Shah stumbled upon a handy little loophole called Cum-Ex. This cute little maneuver allowed banks such as Shah’s to agree to sell a stock prior to a dividend payout but deliver it after, allowing both sides to claim a tax rebate in spite of it only having been paid once. And when Shah fell victim to Rabobank’s financial-crisis-era layoffs, he took that useful bit of knowledge to his hedge fund, Solo Capital Partners, which used it to wildly successful ends that ultimately cost national tax authorities billions upon billions.
Shah does not feel bad about it, because he did not write the law.
“Prove that any law was broken,” Shah said. “Prove that there was fraud. The legal system allowed it….” To the authorities trying to extract him from his exile, he has a piece of advice: know your tax code.
“It’s very nice to put somebody’s face on a front page of a newspaper and say ‘Look at this guy living in Dubai, sitting on the beach every day sipping a Pina Colada while you’re broke and you don’t have a job’,” he said. “I would say look at your legal system.”
He also doesn’t feel bad about it because it’s not his job to feel things.
“Bankers don’t have morals,” the 50-year-old said on a video call. “Hedge-fund managers, and so on, they don’t have morals….”
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Thanks to a reader for giving me a heads-up on the Cum ex crowd.
