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In a report from London, the newspaper said that
the CFTC is examining the issue after asking banks last year for
details about the controversial trades, which can help hedge
funds and other clients cut taxes.
CFTC's enforcement division has sent inquiries to Bank of
America Corp, Citigroup Inc, Deutsche Bank, Goldman Sachs Group
Inc and Morgan Stanley, the Journal said, citing one of the
sources.
The five banks have previously been named as engaging in the
strategy in which banks collect fees on the trades, which can
help clients cut taxes as much as 30 percent of the dividend
payment to 10 percent, according to the newspaper.
U.S. authorities began questioning the trading strategy last
year, according to the Journal, which first reported on the
issue in September.
Earlier this month, Bank of America told CNBC that it no longer
finances dividend-arbitrage activity.
Representatives for the CFTC could not be immediately reached to
comment on the WSJ report, which cited a CFTC spokesman who
declined to comment.
(Reporting by Susan Heavey; Editing by Chizu Nomiyama)
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