21–30 of 93 posts
Largest insider trading ring in history and still running. To agree to 7 billion you can guarantee they are walking away with at least 60 billion squirreled away unseen.
This isn't insider trading. It's tax fraud.
And that for RenTech to agree to this penalty implies they have a ton of money sitting around that they shouldn’t, given the capacity constrained nature of the Medallion fund.
On these I have no opinion. I may have misinterpreted the commenter.
Earlier quoted context omitted.
Your figures are sort of backwards. The article claims they saved $6.8B in taxes and will owe $7.7B in fines.
To clarify, the 7.7 billion figure is the 6.8 billion owed plus ~900 million in interest and fines.
You'd have be almost certain of getting caught for it to not be a great idea.
Earlier quoted context omitted.
For a fun exercise, these activities took place between 2005 and 2015 -- call it 2010 to split the difference. If you assume that they knew they'd likely get dinged for the $7B and just kept that amount in their fund and invested it alongside their employee money - how much profit did they make by litigating this for 10 years to delay the payout?
0, the Medallion fund is capacity constrained.
Here's how they structured their affairs to claim long-term capital gains (via Sen. Carl Levin's testimony [0]): The key financial product involved in these fictions is called a ``basket option.'' ...basket option basics worked like this: The bank sold its hedge fund client a structured financial product, called an ``option,'' whose payoff equaled the profits generated by a ``basket'' of securities held in a designat…
Thanks, this is helpful to understand. They had to know this was a risky play and trying to dodge taxes based on language written in the law by skirting what "ownership" means. The bet didn't pay out because it caught the attention of one dogged person.
Given the crowd, surely they invested the money. Not in Medallion since it is capacity constrained -- but almost everything in the past 10 to 11 years yielded big money. A funding cost of 1% is pretty amazing, they made a boatload of money off this 1% loan from the US Government.
Does anyone know how the Medallion fund has performed taking the tax settlement(s?) into account?
Earlier quoted context omitted.
To clarify, the 7.7 billion figure is the 6.8 billion owed plus ~900 million in interest and fines.
Imagine you steal 500 bucks and if caught, the only punishment is to pay back 600 years later. You'd have be almost certain of getting caught for it to not be a great idea.
What is a typical rate of inflation, compounded over 10 years from 2010 to 2021?