NEW YORK (CNN/Money) - Bank of America, the nation's third-largest bank, is under investigation for helping two wealthy Texans hide their fortunes from taxes, a newspaper reported Friday.

The Wall Street Journal, citing unnamed sources, said federal and state authorities are probing whether Bank of America (Research) violated securities and anti-money laundering laws in helping Sam and Charles Wyly shelter more than $100 million in stock-option gains from U.S. taxes. The paper indicated the probes could expand to include other wealthy clients of the Charlotte, N.C.-based bank.

A Bank of America spokeswoman told the Journal the bank is cooperating with investigators and doesn't believe it broke any laws. A lawyer for the Wylys said his clients did nothing wrong.

The Internal Revenue Service, the Securities and Exchange Commission, and New York District Attorney Robert Morgenthau are reportedly focusing on a popular stock-option transaction that Bank of America and other financial services companies marketed to executives and prominent investors during the 1990s bull market.

The IRS concluded the transaction was an illegal tax shelter and banned it in 2003.

According to the Journal, The IRS alleges that more than 40 unidentified U.S. companies and dozens of executives used the shelter to avoid more than $700 million in taxes.

The Journal noted that the Bank of America investigation comes amid a broader IRS campaign to penalize tax professionals for marketing improper shelters.