British hedge fund trader Sanjay Shah, charged with serious fraud in Denmark over sham Cum-Ex trades, said in court that he and his team did nothing illegal when receiving more than 9 billion kroner ($1.3 billion) in dividend tax refunds from the Nordic country’s authorities, according to Bloomberg.

During the first week of his trial just outside Copenhagen, the Solo Capital Partners founder answered questions about the trading strategy that got him caught up in the sprawling scandal that’s swept up dozens of bankers and implicated a string of international banks.

“There was no wrongdoing or fraud at Solo,” Shah said during cross-examination. “Solo was always in compliance with rules and laws.”

Denmark’s prosecutor alleges that the 53-year-old trader orchestrated a scam that, from 2012 to 2015, earned vast sums of money from fraudulent dividend tax refunds.

The scheme involved rapid trading of shares by a large group of investors, brokers, short-sellers and other agents that could be used to claim multiple refunds of taxes withheld from dividends.

Shah, through Solo and other companies he owned, was behind thousands of tax reclaim applications sent on behalf of hundreds of American and Malaysian pension funds, according to the prosecutor.

While Shah didn’t dispute the number of trades, dividend notes, applications and amounts received in refunds, he repeatedly said he he didn’t do anything wrong. He said there was a “flaw in the system” that allowed those transactions to take place.

Cum-Ex, a controversial trading practice that originated with traders in London and took Germany and Denmark as prime targets, involved a global network of bankers, lawyers and agents exploiting loopholes on dividend payout to reap duplicate tax refunds. By the time Denmark stopped the refunds in 2015, the practice had cost the nation 12.7 billion kroner.

Solo Capital was “not special,” Shah, dressed in black with yellow Adidas sneakers, said in court, adding that other players in the market were providing the same services. But Solo had the unique selling point that it provided the entire credit line to all the parties for trading.

The clients were “well aware” that they were involved in a dividend tax arbitrage trading, but didn’t have any knowledge of the structure beyond the few steps they were involved in, he explained. Solo employees advised clients on how many shares they should trade. 

Two traders have already been convicted in Denmark in relation to the Cum-Ex scandal, while another seven, including Shah, have been charged. Earlier this month fellow British trader Anthony Patterson was handed an eight-year prison sentence after pleading guilty to helping Shah in running the scheme.

In Germany, verdicts are piling up too, while roughly 1,800 people are still under investigation. The UK financial regulator has levied over £20 million of fines on finance firms and individuals for their involvement in illicit dividend tax refunds.

Shah, who was extradited from Dubai last year, remains in jail in Denmark while his trial is underway. The case includes more than 300,000 pages of documents and is expected to last until mid-2025.