25 August 2019
Briton Rurik Jutting did not enter a plea and did not seek bail at his first court appearance on Monday. Photo: Bloomberg
Briton Rurik Jutting did not enter a plea and did not seek bail at his first court appearance on Monday. Photo: Bloomberg

Hong Kong murder suspect worked in controversial tax trades

A 29-year-old British banker charged with the grisly murder of two women in his apartment had been part of a Bank of America Corp. team in controversial tax reduction trades that are under scrutiny by regulators, the Wall Street Journal reported Tuesday.

Rurik Jutting was charged with two counts of murder Monday after the bodies of two women were found in his Hong Kong apartment. He did not enter a plea and did not seek bail.

Jutting worked in Bank of America Merrill Lynch’s structured equity finance and trading group, first in London and then in Hong Kong, the report saod, citing people familiar with the matter.

He resigned from the bank sometime before Oct. 27, which police say was the date of the first murder.

The trading group employs about three dozen people globally, helping hedge funds and other clients manage their stock portfolios, often through the use of derivatives, the report said.

One such vehicle used to help clients reduce taxes on stock dividends by exploiting differences in international tax rules.

Jutting was involved in coordinating efforts between clients, internal and external tax lawyers, accountants and others to arrange dividend-arbitrage trades for clients, according to internal documents.

Bank of America’s dividend-arbitrage trades have drawn scrutiny from Federal Reserve examiners, which this year expressed concerns about potential reputational and financial risks involved with the trades, and are under review by the bank’s lawyers and executives.

German prosecutors and British tax authorities also are investigating one type of dividend-arbitrage trade across the banking industry. Bank of America and other banks curtailed their involvement in those specific trades in 2011.

Bank of America hasn’t been accused of wrongdoing in relation to tax-related trades.

Jutting joined Bank of America in 2010 and worked three years in its London office, the bank’s hub for dividend-arbitrage trades, before moving to Bank of America’s Hong Kong office in July 2013.

His resignation last month followed a period when he was missing from the office, the report said.

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