Mirror Trades and Tax Tricks

Deutsche mirrors.

I like a good scandal as much as anyone, but the Deutsche Bank mirror-trading scandal leaves me pretty blah. Some Russians had money in Russia, and they preferred to have it elsewhere. That seems understandable? So they bought some stocks in Russia, and sold the same stocks (from the accounts of related offshore entities) in London, usually running both legs through a Deutsche Bank trading desk. The result was that they had less money in Russia and more in London, although if you do the accounting it would seem that they’d also be building up a large stock position in Russia and an offsetting short position in London. I’m a little curious how they closed out their short positions in London. Did they, like, fly bags of stock certificates from Moscow? Doing the mirror trades solves the problem of moving cash from Moscow to London, but would seem to leave a residual problem of moving stock.