Jeffrey Yass is an American options trader that co-founded the Philadelphia-based Susquehanna International Group (SIG). In addition to making his own bets, Yass built his firm into one that stands at the very center of the market and takes bets from other traders. Thanks to an option bet that would pay out if stocks went down, Susquehanna was one of the few firms that made money on one of the worst days in stock market history. Susquehanna also stands apart in how its taxes are prepared, ProPublicas records show. If Yass collects expensive art or maintains a megayacht, he has managed to do so in complete secrecy. Jeff Ernsthausen is a senior data reporter at ProPublica. A spokesperson for Yass did not comment on the donations. Compared to many of his fellow billionaires hes richer than Hollywood mogul David Geffen, retail brokerage king Charles Schwab and Star Wars creator George Lucas Yass doesn't seem particularly interested in the trappings of extreme wealth. Then he returned to the East Coast and settled in Philadelphia, where he began trading options. Yass, just 27, then sued for the right to place the bets. Susquehannas tax avoidance has gone on for years, resulting in a strikingly low tax rate for Yass and his partners, according to ProPublicas analysis. In-game bets can bless some coaching decisions with improved odds, while punishing others. You simply need to beat the weakest player, and thats essentially what options contracts are meant to do. The IRS deems those to have been illegal under tax law. ProPublica estimates his true wealth is likely at least $30 billion based solely on his income over the decades and stake in ByteDance which would place him in the top 25. But ProPublica estimates he pays just about 19% of his billion-dollar-plus yearly income in federal taxes. Jesse Eisinger is a senior editor and reporter at ProPublica. * Susquehanna makes an early investment in ByteDance. In 1987, he cofounded Susquehanna with a handful of partners; it's now a giant in options trading and making markets, with 2,000 employees worldwide. During that time, Yass paid an average federal income tax rate of just 19%, far below that of comparable Wall Street traders. From early on, Yass cultivated Susquehannas brand as a home for the biggest brains in finance, hiring Ph.D.s and top students. Bloomberg reporting. The heads of these firms, like Yass, reported incomes larger than almost anyone else in the country from 2013 to 2018. To securely send Justin documents or other files online, visit our SecureDrop page or reach him through one of the methods below. He went to SUNY Binghamton, became a pro gambler, then began trading on the Philadelphia Stock Exchange in 1981 backed by billionaire Israel Englander. They called Yass. (There are billionaires who pay more, and less. ), the person said Yass contributes to organizations who support the free government policies he believes in like drug decriminalization, the end of eminent domain abuse and demilitarization of the police. [7] He earned a BA in mathematics and economics from Binghamton University. Any website our stories appear on must include a prominent and effective way to contact you. The Susquehanna Foundation is deeply invested in reforming education through school choice, bolstering charter options and providing tuition vouchers for low-income families. If youre republishing online, you must link to the URL of this story on propublica.org, include all of the links from our story, including our newsletter sign up language and link, and use our. When he was in high school, Jeffrey made his first trade through his father. So the losses from the Coke trade reduce the existing pile of short-term gains. He notably just donated $2.5 million to the Protect Freedom PAC, which perpetuates the debunked idea that Democrats used COVID-19 and various forms of voter fraud to steal the election. In options Yass found more than a financial instrument. We think it is here to stay, Pollard said. A few months earlier, theyd wagered $160,000, gambling that, with tens of thousands of bets, they could nail the exact order of seven horses in three different races. He made $1 million before his 30th birthday. Three minutes later, the trader sent out a second email, this time to Morgan Stanley. Susquehanna is one of the 20 largest investors in the world, according to most estimates. Yass Tax Rate Remained Low Even as His Income Grew to Billions, Court filings and ProPublicas analysis of tax records suggest that, as of 2018, Yass owned around 75% of Susquehanna, with co-founders Dantchik owning around 19% and Greenberg around 3%. They are also useful to the risk-embracing gamblers who want to place outsized bets on how a stock will perform. Love Philly? When Financhill publishes its #1 stock, listen up. One Susquehanna Fund Generated Tax Savings by Combining Huge Gains and Losses. [1], In March 2021, an investigation in Haaretz said that Jeff Yass and Arthur Dantchik were behind a large portion of the donations to the Kohelet Policy Forum in Israel. Susquehanna once petitioned the state of Pennsylvania to demand a refund of taxes paid on repairs to ice machines. The petition was denied. There, too, the winnings have been immense: at least $1 billion in tax savings over six recent years, according to ProPublicas analysis of a trove of IRS data. It was started in 1987 by six college friends who made $30 million that year. [23], Yass is married to Janine Coslett. [15], Allegations of frontrunning client accounts, Learn how and when to remove this template message, "Susquehanna International Group Careers & Jobs", "One Firm Is Way Ahead of Wall Street on Bitcoin", "Lower Merion, Pennsylvania is MONEY's No. As one former employee put it, They hate fucking taxes.. The Bala Cynwyd, Pennsylvania-based company makes markets in financial products and asset classes with a focus on derivatives. Chargers general manager Tom Telesco stressed once again at the NFL Combine that removing the veteran Allen from the roster isnt an option as L.A. tries to squeeze under the salary cap. They bet against bad traders and figured out the statistical odds. Former Susquehanna traders believe the firm risked going out of business. The Milwaukee Bucks are trying to rediscover corner magic and weaponize the three-point shot in their offense. Thats because of how taxes are calculated. But the trading pattern has similarities to the 2010 Swiss stock trades, which involved betting for and against the exact same stocks. [1] They have four children, two sons and two daughters. Yass averaged 19%. But the firm also acknowledged the deal was tailored with an eye to tax efficiency. The case is still pending, with Susquehanna currently resisting requests to turn over more documents. In 2001, he joined the executive advisory council of the Cato Institute. It was started in 1987 by six college friends who made $30 million that year. Over two decades, Jeff Yass and five other founders and many people who work for. The result is that by the arithmetic of the U.S. tax code, $100 made from a sale on the 365th day is worth around $60 after taxes. $2.5 billion, according to our most recent tally. [15] In 2018 he donated $3.8m to the Club for Growth, and $20.7m in 2020. Collectively, fund executives and investors paid an undisclosed amount, reportedly in the billions, in back taxes and penalties. Ordinary income including from short-term stock trading was taxed at about 40% for high earners in 2017. Yass low rate is particularly notable because Susquehanna, by its own description, specializes in short-term trading. What comes closest to an identifiable trophy asset is a house in the ultra-exclusive Georgica Association beach neighborhood of East Hampton on New Yorks Long Island. One of the candidates the group backed, Sen. Josh Hawley, R-Mo., had objected to certifying the presidential election results just days earlier. Site Map | Disclosures | Privacy Statement. According to a 2009 Philadelphia magazine profile, hes notorious close-mouthed about business strategy because he doesnt want to let anyone in on what he does, and how., Love Philly? Sign up for the free Billy Penn newsletter and stay in the know. Sign up to receive our biggest stories as soon as theyre published. At the same time, Trump and other administration officials were personally involved in trying to broker a deal to avoid finalizing the TikTok ban. They were known as intellectuals who were more interested in gambling than reading books and taking tests. It is also worth noting that Mr. Yass is a self-described Never Trumper who has never questioned or denied the results of the 2020 election.. The money made from the Coke trade, meanwhile, goes in the long-term bucket. According to Alphacaution Research **, Susquehanna accounted for nearly a . Yass has not only worked assiduously to lower his own taxes but has poured millions into political efforts to eliminate them for his class. More by Layla A. Jones, Headquarters of Susquehanna International Group in Bala Cynwyd, linked to conservative political action committee, Phillys Rebuild program is finally on track to finish all the renovations on its list half as many as originally hoped, 5 things to know about Joanna McClinton, Pa.s first Black woman House speaker, Masterman parents criticize school lottery; Muslim center vandalized; West Philly hoagie spot modernizes | Morning roundup, Former Councilmember Bobby Henon sentenced to 3.5 years in prison for taking bribes, Fu-Wah, the beloved West Philly hoagie shop, is now accepting credit cards after 40 years, Proudly powered by Newspack by Automattic. To understand Susquehanna, we need to first examine its mysterious co-founder. Its the technology that has pointed the way toward favoring some plays over others, and bets have followed whether or not coaches embrace them, too, he said. A spokesperson for Simons declined to comment. These stocks were among the largest companies in the S&P 500 index. Later that month, Yass gave the group another $5 million, and more ads ran against Biden. Hes looking forward to a day when sports betting is legal in all states and also between gamblers in different states, instead of smaller, state-by-state markets. ), The firms willingness to push the boundaries of tax law is not surprising to people who know Yass and his partners. If you like our stories, mind sharing this with a friend? The tracks lawyer fumed to a federal judge that the men were trying to corner the betting market through the use of their statistics and numbers.. He is also the largest donor to the Rand Paul-affiliated Protect Freedom PAC, giving $2.5 million of his more than $12 million in recent donations just days after the 2020 election. In fact, they would often skip class to attend races and play their bets, but that didnt stop the friends from passing tests with A-grades and earning degrees. Donald Trumps real net worth? The IRS has questioned the strategy, according to ProPublica. From published authors to triathlon runners and everything in between, get to know a few members of SIG team. In the end, the trader has essentially transformed short-term gains into long-term gains, the type taxed at the special lower rate. It doesnt matter how seemingly trivial it is.
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