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N.Y. Officials Investigate Private Equity Firms

STEVE INSKEEP, HOST:

NPR's business news starts with a subpoena.

At least a dozen private equity firms are being investigated by New York State over their use of a questionable tax strategy.

DAVID GREENE, HOST:

And among the firms being subpoenaed is Bain Capital, the company founded by Republican presidential candidate Mitt Romney.

The New York Times reports the state's attorney general, a Democrat, is looking into whether the firms converted fees for managing funds into investment income, allowing it to be taxed at a much lower rate.

INSKEEP: Experts have mixed views of this tax strategy. The paper reports that some call it aggressive, others say it's potentially illegal.

Romney's campaign issued a statement that argued the tactic is, quote, "common and totally legal," but noted that the candidate did not benefit from it in his own investments. Transcript provided by NPR, Copyright NPR.

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