Are banks in for a lot of grief regarding their total return swaps business? Some are pointing to FINRA's $600,000 fine of Citigroup (C)for the failure to control trading in total return swaps, according to the Financial Times. Dividends on U.S. stocks that foreign investors own are subject to withholding taxes, depending on specific agreements between the U.S. and the investor's country. But in some cases, these dividends have been paid without taxes being withheld.

This isn't necessarily a new issue. Back in 2006, Citi paid $24 million to the IRS "in relation to the withholding of dividend taxes on a limited set of swap transactions from 2003 to 2005." Granted, $600,000 is a paltry sum, but you have to wonder if we're in for more fines. 

For more:
- here's the article

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