U.S. regulators probe bank maneuver to cut hedge funds' taxes

A trading strategy employed by large banks to help hedge funds and other clients cut taxes has drawn criticism from U.S. The trading strategy, known as "dividend arbitrage", involves banks temporarily transferring ownership of a client's shares to a lower-tax jurisdiction at a time when the client expects to collect a dividend on those shares, WSJ said, citing people familiar with the matter. Bank of America Corp was recently questioned by U.S. Other banks that arrange similar transfers include Citigroup Inc, Deutsche Bank, Goldman Sachs Group Inc and Morgan Stanley, the newspaper said, adding that it wasn't clear if these banks have been questioned about the strategy.

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