Thomson Reuters Tax & Accounting News

Featuring content from Checkpoint

Back to Thomson Reuters Tax & Accounting News

Subscribe below to the Checkpoint Daily Newsstand Email Newsletter

JPMorgan probed over role in French tax evasion case

PARIS (Reuters) – U.S. bank JPMorgan Chase has been placed under formal investigation in France as part of a probe into alleged tax evasion by senior managers at investment firm Wendel, a court official said on Wednesday.

A Paris-based spokesman for JPMorgan declined to comment on the move, part of a wider investigation in which as many as 14 Wendel executives face charges including tax evasion and insider trading over transactions conducted in 2004-2007.

The bank is suspected of acting as an accessory to tax evasion, the court official said.

In a U.S. regulatory filing on Tuesday, JPMorgan said that in April it had been “notified that the authorities were formally investigating its role” in transactions financed by the bank on behalf of a number of Wendel managers.

Though JPMorgan provided financing for the deal from its Paris branch, it was not a tax advisor, according to a person familiar with the matter who was not authorized to speak publicly. The deal was booked in France, the person added.

France has vowed to crack down on tax avoidance by individuals, offshore companies and the financial institutions that serve them, following publication of leaked HSBC client data that had been handed to the Paris authorities in 2008.

French magistrates last month ordered HSBC to post bail of 1 billion euros ($1.13 billion) to cover potential fines if convicted on charges that it helped French clients dodge tax.

In the separate three-year investigation concerning Wendel, the former head of French employers’ organisation Medef, Ernest-Antoine Seilliere, was formally accused of tax fraud last October.

His predecessor at the helm of the investment firm, Jean-Bernard Lafonta, was placed under investigation five months earlier on insider trading charges.

JPMorgan is also defending separate civil claims by some of the same Wendel managers, according to the quarterly 10-Q filing made on Tuesday, which gave no further details.

“JPMorgan Chase is responding to and cooperating with the investigation,” it said.

In afternoon trading in New York, JPMorgan shares were down slightly more than 1 percent, in line with other big U.S. banks.

($1 = 0.8818 euros)

Tagged with →