Barclays : U.S. panel says Barclays, Deutsche Bank helped funds avoid taxes

The head of a powerful U.S. Senate panel has accused Deutsche Bank AG (>> Deutsche Bank AG) and Barclays Plc (>> Barclays PLC) of helping hedge funds avoid taxes, calling for tougher action from the authorities.

The head of a powerful U.S. Senate panel has accused Deutsche Bank AG (>> Deutsche Bank AG) and Barclays Plc (>> Barclays PLC) of helping hedge funds avoid taxes, calling for tougher action from the authorities.

The banks sold complex option products to Renaissance Technology Corp [RENST.UL] that saved it and other hedge funds billions of dollars in taxes, Democratic Senator Carl Levin, who heads the U.S. Senate Permanent Subcommittee on Investigations, said on Monday.

“Ordinary Americans had to shoulder a tax burden of billions of dollars, a burden that was shrugged off by these hedge funds,” Levin told a news conference.

“And those same Americans will pay the price as the excess risk from massive over leveraging once again destabilises our economy as it has in the past.”

Levin’s committee presented the findings of a year-long probe into so-called basket options, which Levin said can be misused to lower taxes, and plans to grill representatives from the banks and Renaissance in a public hearing on Tuesday.

Read on.

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