Hedge Fund’s Insiders Agree to Pay as Much as $7 Billion to I.R.S.

While Mr. Simons, 83, who stepped down as chairman of the $55 billion firm last year, supported Hillary Clinton in that race, Mr. Mercer, 75, has donated tens of millions of dollars to Republican candidates and political action committees. He also reportedly invested $10 million in Breitbart News, and was a key supporter of Stephen K. Bannon, who was Breitbart’s chairman before becoming Mr. Trump’s chief strategist.

The billions in payments to the I.R.S. will be made by current and former investors in a small group of Renaissance funds, but principally its Medallion fund. Those investors include seven people who were members of the firm’s board between 2005 and 2015, as well as their spouses. Mr. Simons will make a payment of $670 million on top of his obligation as part of that group, according to the letter.

“Renaissance’s board ultimately concluded that the interests of our investors from the relevant period would be best served by agreeing to this resolution with the I.R.S., rather than risking a worse outcome, including harsher terms and penalties, that could result from litigation,” Peter Brown, the firm’s chief executive, wrote.

The Wall Street Journal and Bloomberg reported the settlement earlier Thursday.

Renaissance is best known for pioneering a data-intensive form of stock trading called quantitative strategy, which has been adopted by many other hedge funds and trading platforms on Wall Street. The settlement centers on the firm’s Medallion fund, which manages about $15 billion, mostly for employees and former employees of the firm and their family members.

Mr. Simons founded the firm in 1982. Once the head of the math department at Stony Brook University on Long Island, he was a code-breaker for the U.S. military during the Vietnam War. He stepped down from the firm’s day-to-day operations in 2010, handing the reins to Mr. Mercer and Mr. Brown as co-chief executives.

Article source: https://www.nytimes.com/2021/09/02/business/renaissance-irs-robert-mercer-james-simons.html