Banks Helped Funds Skip Taxes: Report

Morgan Stanley(MS), Lehman Brothers(LEH), Citigroup(C) and Merrill Lynch(MER), among others, helped foreign hedge-fund investors avoid billions of dollars in U.S. taxes over the past decade, according to a report by Senate investigators, the Wall Street Journal reports.

The probe found that certain brokerages and investment banks competed to devise transactions that allowed hedge funds to avoid withholding taxes imposed on dividends paid by U.S. companies, according to the Journal.

The report is scheduled to be released Thursday at a hearing in Washington by the Senate Permanent Subcommittee on Investigations.

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