Executives at a New York hedge fund have agreed to pay as much as $7 billion to settle a long-running dispute with the U.S. tax authorities, according to reports Thursday.
The Wall Street Journal and The New York Times reported that insiders at Renaissance Technologies agreed to the deal that could be one of the largest in U.S. history.
Among those in the settlement are Renaissance founder and prominent Democratic Party donor James Simons, who lives in East Setauket, and Robert Mercer, who was a major donor to former President Donald Trump’s campaign, according to the reports.
Renaissance had been locked in a yearslong dispute with the Internal Revenue Service after a Senate investigation determined that the firm used complex financial instruments to avoid paying nearly $7 billion in taxes.
The deal covers transactions between 2005 and 2015 and moves by the hedge fund to convert short-term trading gains into long-term profits, according to the reports.
Messages were left with Renaissance and the IRS seeking comment.
Simons, 82, worked for the U.S. government as a codebreaker during the Cold War and was chairman of the Stony Brook University mathematics department from 1968 to 1976.
He left academia and founded the hedge fund in 1982, hiring mathematicians and computer scientists who applied innovative algorithms and high-speed trading to money management.
In the process, Simons became a billionaire and the Medallion fund became one of the most successful investment vehicles in history.
Forbes has estimated Simons’ wealth at $23.5 billion, making him the 36th richest person on the planet.
With Newsday staff