Some of the US' biggest investment banks and brokerage firms - including Morgan Stanley, Lehman Brothers, Citigroup and Merrill Lynch - marketed allegedly abusive transactions that helped foreign hedge fund investors avoid billions of dollars in US taxes over the past decade, according to a report by Senate investigators.

The year-long probe, which relied in part on internal bank documents and emails, concludes that Wall Street firms actively competed with one another in dreaming up complex transactions that allowed hedge funds to avoid withholding taxes imposed on dividends paid by US companies.