As I understand it, it "wasn't considered illegal" and for some shady minds that means it is legal, even if highly dubious or morally wrong. The mechanism that

As I understand it, it "wasn't considered illegal" and for some shady minds that means it is legal, even if highly dubious or morally wrong. The mechanism that made it possible was outlawed at some point, I think 2011, but the fraud continued. There is a simplified explanation of the mechanism here [1], from which the following is taken: > Simplified, cum-ex trading works something like this: > Party One [..] "lends" its stock to Party Two, a bank. Under the agreement, the title and ownership of the stock is temporarily transferred to the borrower in return for a fee. [..] > Party Two then sells the shares with-dividend to Party Three fractionally before the Record Date [i.e. dividend soon-to-be-payed]. However, the shares are delivered without-dividend just after. > Like a magic trick, the shares "disappear" fractionally before the Record Date and "reappear" with a new owner just after. The aim is to obscure exactly who – Party One, Two or Three – owns the stock on the Record Date. As a result, two parties can simultaneously claim ownership of the one stock. > Up until 2011, a loophole in the German tax code allowed both Party One and Party Three [..] to claim a tax reimbursement. All colluding parties would then split the gains. [1] https://theconversation.com/the-robbery-of-the-century-the-cum-ex-trading-scandal-and-why-it-matters-124417 https://theconversation.com/the-robbery-of-the-century-the-c...