US bank agrees 25 million euro deal to settle French tax fraud investigation

·1-min read

US banking giant JPMorgan Chase has agreed to pay 25 million euros to settle a long-running criminal investigation into allegations it helped a French investment bank commit tax fraud.

The French Financial prosecutors office alleged that JPMorgan helped executives of the Wendel investment group set up a profit-sharing entity that enabled them to avoid paying taxes on millions of euros of investment gains in 2007 and 2008.

Under the terms of the settlement deal, JPMorgan did not plead guilty, and the bank avoids having to go to trial over the affair.

The bank’s lawyers said they would not contest the settlement, ending the nearly decade-long inquiry.

The investigation was launched in 2012 after tax authorities discovered a financial instrument called Solfur, created in 2004, which yielded a net 315 million euros for its shareholders for an initial investment of just under a million euros.

The gain was "completely tax-free," according to a 2015 document obtained by France's financial fraud investigators.

Investors included three Wendel board members -- who include Ernest-Antoine Seillière, a former head of the Medef, the main employers' union -- and 11 top managers, who will all face trial at the beginning of next year.

JP Morgan’s settlement comes just weeks after the bank opened its new trading floor in Paris, making the city its main European trading centre.

The settlement is the ninth made by the Financial prosecutor’s office, which was set up in at the end of 2013.

In 2020 the office collected 2.1 billion euros from Airbus in a settlement for a bribery case, and 500 million euros from Google in 2019.

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