HSBC is preparing to pay roughly $300 million to settle a long-running criminal probe in France over its alleged involvement in dividend-related tax schemes, according to information first reported by Bloomberg News and later reviewed by Reuters. People familiar with the talks told Bloomberg that prosecutors from the Parquet National Financier have drafted a settlement proposal that could go before a Paris judge within weeks.
Scrutiny over dividend trades intensifies in France
The investigation focuses on so-called cum-cum transactions. These trades allow foreign investors to shift French shares to local tax-exempt entities, often domestic banks, around dividend dates. By transferring the shares before the payment and returning them after, investors could reduce or avoid withholding taxes that normally apply. French authorities have spent years examining the practice across several major financial institutions.
HSBC acknowledged the pressure in October when it set aside a $300 million provision to cover ongoing inquiries into the trades. The bank declined to comment on the Bloomberg report when contacted by Reuters. The PNF also did not confirm the terms or timing of any agreement.
France has pursued a series of settlements tied to these strategies. In September, Credit Agricole’s investment banking division agreed to pay about 88.2 million euros, just over $102 million, to resolve accusations linked to the same dividend-tax scheme.
The potential HSBC settlement, if approved in court, would mark one of the largest financial penalties in France related to cum-cum transactions. It also signals that French prosecutors intend to keep pressing global banks over practices that have cost European treasuries billions in lost revenue.