Hedge Funds Politics & Regulation

Financial firms helped offshore funds, foreign investors avoid taxes, says U.S. Senate


A number of investment banks and brokerage firms knowingly helped foreign investors, including offshore hedge funds, avoid taxes on U.S stock dividends, a Senate subcommittee said this week. The allegedly fraudulent transactions helped these foreign investors avoid billions of dollars of taxes, according to a report released late Wednesday night by the Senate's Permanent Subcommittee on Investigations.

The report says that the subcommittee reviewed practices at nearly a dozen financial firms and "uncovered substantial evidence that U.S. financial institutions knowingly developed, marketed, and implemented a wide range of transactions aimed at enabling their non-U.S. clients to dodge U.S. dividend