(Source: IRS data, ProPublica analysis.). It holds major stakes in companies like Payoneer, Credit Karma, and Agora Inc. On top of this, its returning to its roots by getting involved in the sports betting market too. 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. Still, the firm had an inside vs. outside mentality. In the 2020 election cycle, Yass was the seventh-largest billionaire donor in America. ), READ MORE: Meet the billionaire and rising GOP mega-donor whos gaming the tax system. That was the single biggest such payout in ProPublicas database of IRS records, which includes thousands of audits of the wealthiest people in the country. Thats because of how taxes are calculated. They can appeal to the risk-averse: Traders can use them as insurance to guarantee they will be paid at least todays price when they sell in the future. Then action is taken or avoided accordingly. California residents do not sell my data request. He placed a second bet, now wagering against the exact same stocks in the exact same amounts hed just ordered from Credit Suisse. ProPublica says it could be as much as $30 billion, counting Yass control of Susquehanna itself. SIG continues to provide liquidity with functions staffed as normal and clients able to liaise with their usual business contacts. [1] They have four children, two sons and two daughters. We had an interest in sports and sports betting. Its not clear whether the IRS has ever challenged the firms trading inside Susquehanna Fundamental Investments. Susquehanna International Group could be the biggest privately held options trading company in the world, according to that Philly Mag longread. In all, the credits have saved Yass and the others at least $53 million in state taxes, records show. When IRS auditors scrutinized the deal, they found that Susquehanna had violated rules against betting for and against the exact same stocks. (His father had also helped nurture Yass love of horse racing by taking him to local tracks to see harness racing, according to Forbes.) But that summer day, when they presented their strikingly long list of bets at the track window, they were turned away. Yass is a founding director of the CLAWS Foundation. Simons himself ultimately paid the IRS at least $670 million to resolve the case. Local news should be free and accessible, which is why we ask readers like you to support our work rather than charging a fee to see it. The programs limited the state tax credits a single company could receive, but Yass and the others found a way to sidestep the limits. Yass also has a minority stake in ByteDance, the developer of TikTok. In 2017, Susquehanna set up its own sports analytics unit, Ireland-based Nellie Analytics, which began calculating odds and taking bets from European sports gamblers, including on U.S. pro games. He created special trusts designed to sidestep the estate tax when passing money to heirs at death, court records show. Their goal was to become professional poker players, but Yass took a lot of hard knocks while learning the ropes of that industry. A 1992 federal law barred most sports gambling. Source: IRS data. Encouraged by his father, he took an interest in stocks and gambling at an early age. Its not clear if Yass or Dantchik talked to the White House about the deal, which ultimately fell through. The market making business in stock options, Susquehannas specialty, requires juggling a huge number of trades while constantly keeping an eye on all the various bets to make sure that the firm is protected from unexpected market moves. More broadly, do you have expertise in tax law or accounting? One time, as recounted in Philadelphia magazine, traders bet on whether Yass could name the last Plantagenet king of England. If youre the sixth-best poker player in the world and you play with the five best players, youre going to lose, he said. [3], SIG was founded in 1987 by Jeff Yass, Gerald Yass, Arthur Dantchik, Steve Bloom, Eric Brooks, Andrew Frost and Joel Greenberg. So, for every $100 run through this process, the trader would net from $17 to $20 in tax savings. 10% of the management team is Black or African American. While many firms lost money in 1987, Susquehanna came out ahead on Black Monday having insurance put options in place. And its the instincts and skills he picked up along that path that ultimately led to his success with the firm. Its okay to put our stories on pages with ads, but not ads specifically sold against our stories. Benefits. In 2016 he supported both Sen. Rand Paul (R., Ky.) and Libertarian Gary Johnson against Trump for President. It doesnt matter how seemingly trivial it is. [5], In 2006, SIG launched Susquehanna Growth Equity, which invests in software and information services, and offers growth stage funding to companies operating in the US and Israel. Do you have tips to share? [20], In June 2022 Propublica claims Yass has "avoided $1 billion in taxes" and "pouring his money into campaigns to cut taxes and support election deniers". Susquehanna has invested in hundreds of private companies globally, including TikTok parent ByteDance, its most valuable holding based on Forbes reporting. SIG comprises a number of affiliated entities specializing in trading and proprietary investments in equities, fixed income, energy, commodity, index and derivative products, private equity and venture capital, research, customer trading and institutional sales. Do you think anyone knew Hawley was going to do that? The money has gone to everything from anti-tax advocacy and charter schools to campaigns against so-called critical race theory and for candidates who falsely say the 2020 election was stolen and seek to ban abortion. But his ultralow profile meant that almost nobody knew that. If you werent with the firm, you were the enemy. Then he returned to the East Coast and settled in Philadelphia, where he began trading options. What you need to know about the richest man in Pennsylvania and how he spends his money. The office had Super Bowl pools and an officewide lottery. At SIG, you will learn something new every day. (Source: IRS records, ProPublica analysis), Note: Income tax here is calculated using the IRS definition of total income tax, which excludes payroll taxes. In 2011 and 2012, the group made a combined $35k donation to the Center for Security Policy, an anti-Muslim operation. Methodology: The Bloomberg Billionaires Index is a daily ranking of the world's richest You cant state or imply that donations to your organization support ProPublicas work. Part of the two-story trading floor at Susquehanna International Group's headquarters on City Ave. in Bala Cynwyd. During the 2020 election, it ran ads supporting Senate candidates such as David Perdue and Kelly Loeffler of Georgia, as well as House freshmen Madison Cawthorn and Lauren Boebert of Colorado, both of who voted against certifying the 2020 election results on the day of the Jan. 6 Capitol riot. In essence, it held a bet against many of those exact same stocks. The 60-something resident of the Philly suburbs is originally from Brooklyn, New York. The six co-founders met in the late 1970s at the State University of New York at Binghamton, where they gathered to play cards. our complete methodology , Design & development: Today, Yass, who reveres the economist, is trying to bring Friedmans ideas to fruition. A person close to Yass told Billy Penn the trading mogul doesnt believe the election should have been overturned or that it was stolen by Democrats. Thats because Susquehanna is a juggernaut on a lot of major exchanges, and it continued to grow and control about 10 percent of the market-maker volume trading over 130 million shares in 50 countries each day. He is the co-founder and managing director of the Philadelphia-based Susquehanna International Group (SIG) and an early investor in TikTok. Yass has since backed a range of pro-Trump candidates. You are free to republish it so long as you do the following: Note: ProPublica contacted representatives for each of the billionaires listed here. Momma always said I was like the other kids, the trader said. Hold a security for less than 366 days, and you are on the wrong side of that line. This includes publishing or syndicating our work on platforms or apps such as Apple News, Google News, etc. By the time Yass graduated from the State University of New York at Binghamton in 1979, he was already captivated by trading. He sits on the board of the Cato Institute, a libertarian think tank. Options are a versatile tool. Here are the best shows hitting Netflix this month. It made $30 million on puts during the October 1987 market crash and became a trading giant in a controversial market. 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. Susquehanna recruited chess masters, engineers, and math grads, and taught them to play casino poker, among other skills. For a college economics class, Yass wrote a final paper titled, "An Econometric Analysis of Horse Racing," that he eventually published in Gambling Times magazine. In calculating tax rates, ProPublica used the standard methodology used by the IRS for Yass and every other individual mentioned in this article. Jeff Yass's net worth of In-game bets can bless some coaching decisions with improved odds, while punishing others. Yass provided some 65% of the $13.1 million that Protect Freedom raised during last years election cycle. The other super-PAC Yass supported last year, Protect Freedom Political Action Committee, is tied to Sen. Rand Paul (R-Ky.). member of FINRA. Yass donated to several conservative political action committees that backed Georgia Republican congressional candidate Matt Gurtler, who was photographed last spring posing with a known white supremacist and one-time member of the Ku Klux Klan. Amazon, Alphabet, Salesforce and Disney have all slashed staff this year, citing cloudy economic forecasts. Its traders became a fixture in the PHLX basement trading floor at 19th and Market Streets (now Nasdaqs options business at Philadelphias FMC tower) before expanding worldwide. If the Eagles win, all 2,500 of Susquehannas employees gets a $1,000 bonus. ProPublica has pieced together the details of Yass tax avoidance using tax returns, securities filings and court records, as well as by talking to former traders and executives. [7], Also in 2006, the firm invested in Kuxun, a search engine company, which was sold to Expedia in 2009. Yass is a cofounder of Susquehanna International Group, one of Wall Street's largest and most successful trading firms. Jeff Yass, head of Susquehanna International Group and the richest man in Pennsylvania, according to Forbes, collected an average of $1.3 billion a year in annual income from 2013-18, the sixth-highest income of all Americans, according to tax records collected by ProPublica, a nonprofit reporting enterprise.. Only five other Americans earned more. In . Towards the end of the year, one bet will be up, and one will be down. Its a business that thrives when theres lots of trading volume but can be dangerous if markets crash. We have used the same methodology to measure income-tax rates for every article in our Secret IRS Files series. [33], Last edited on 28 February 2023, at 16:13, Port Authority of New York and New Jersey, "Bala CEO's $25 Million Contribution to Republican Candidates and Groups Makes Him One of America's Top Political Donors", "The U.S. billionaires secretly funding the right-wing effort to reshape Israel", "Beating the Odds Susquehanna International Jeff Yass", "Susquehanna International Group LLP Stands To Make Billions Off TikTok", "LIU Brooklyn Alum Gerald Yass Endows Scholarship for Accounting Majors", "MIT Sloan Sports Analytics Conference Speaker | Jeffrey Yass", "How Trader Jeff Yass Parlayed Poker And Horse Race Handicapping Into A $12 Billion Fortune", "Center for Monetary and Financial Alternatives", "Million-Dollar Donors in the 2016 Presidential Race", "Billionaires backed Republicans who sought to reverse US election results", "DeVos isn't opposed to public education, she opposes failing schools", "Jewish American tycoons are financing far-right policies in the US and Israel", "Meet the Billionaire and Rising GOP Mega-Donor Who's Gaming the Tax System", "Centrist Democratic PAC's Sole Funder Is a Republican Megadonor", "Margaret Coslett Obituary (2015) - Times Leader", "Port authority establishes world trade center memorial fund to aid victims and their families", "Protecting Children in a Time of Crisis - Annual Report 2008", "Revitalizing Newborn and Child Survival - Annual Report 2009", https://en.wikipedia.org/w/index.php?title=Jeff_Yass&oldid=1142116676, This page was last edited on 28 February 2023, at 16:13. Similarly to how Susquehanna has taken advantage of small differences in prices of options or stocks, it has found ways to exploit a gap in tax rates to save hundreds of millions of dollars in taxes every year. Yass averaged 19%. He attended college at the State University of New York Binghamton. Susquehanna will have its own cheering crowd at Sundays game in Arizona against the Kansas City Chiefs. Yass stood to collect billions until President Trump demanded American companies be given a controlling share. A Bloomberg profile in 2018 reported that Susquehanna trades 100 million exchange-traded fund shares daily. 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. He is on the board of directors of the Washington DC-based libertarian think tank Cato Institute. In all, Yass has donated $32 million to the Club, which works to cut taxes on the rich, and millions more to PACs he controls. This growing market raked in an estimated $3 billion in bets in one month, and the year-over-year growth of 53.5 percent in the industry means $237.5 million in revenue. If the speculator thinks the companys fortunes will improve dramatically this summer, they could pay just $4.50 each for options to buy the stock at $250 in mid-August. Starting in the late 1990s, Yass, his top partners, and a team of tech investors also began pouring the firms trading profits into private companies in the U.S., Southeast Asia, Europe, Israel, and especially China, where its best-known hit is ByteDance, the still-private company that owns TikTok, whose total value has been estimated at more than $50 billion. That one donation made up 70% of the PACs annual fundraising. Her work has helped underserved community organizations, earned free repairs for property owners who sustained If the stock soars over that figure, they could make a mint.). ), 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. I guarantee a 28-10 win, Yass said, laughing, in a conference room overlooking City Avenue, down the hall from the two-story, screen-filled trading room. That income is used to calculate the value of his other assets, including adjustments for taxes and market performance. Like many religious stories, his begins with a conversion experience. But Yass and his colleagues have managed to avoid higher taxes anyway. Susquehanna Financial Group, LLLP (SFG), an affiliate of SIG, is a [22], As of 2023, he was the richest man in Pennsylvania, according to The Intercept. Today, co-founders Jeffrey and Gerald Yass, along with the rest of them, are seasoned billionaire investors. It even reportedly holds a stake in TikTok. Valuations are Susquehanna Fundamental has to disclose a snapshot of certain holdings with the Securities and Exchange Commission a few times each year, though many types of trades are exempt from disclosure. You cant use our work to populate a website designed to improve rankings on search engines or solely to gain revenue from network-based advertisements. That suggests that Yass adult children, two of whom work at Susquehanna, stand to someday inherit multibillion-dollar fortunes tax-free. Fact-based, independent journalism is needed now more than ever. [18][19], In November 2021, he donated $5 million to the School Freedom Fund, a PAC that runs ads for Republican candidates running in the 2022 election cycle nationwide. State Sen. Anthony Hardy Williams (D-Philadelphia) is a longtime friend of the Yass family and a frequent recipient of their largesse. Speaking on condition of anonymity (did we mention secretive? But if you earn the right kind gains on long-held investments youll pay half as much in taxes. Help Us Report on Susquehanna, Jeff Yass, and Taxes. Like other big trading complexes that did huge business with investment banks, Susquehanna benefited from the massive federal bailout of Wall Street, which propped up the giant firms that were among its biggest trading partners. The son of two New York accountants, Yass graduated the State University of New York at Binghamton and used the math he learned to bet on racehorses and poker. Thats what makes his blood flow.. The firm benefited from explosive growth in options markets. 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. An option, by contrast, is a contract that confers the right to buy or sell a given stock at a particular price and time in the future. From 2003 through 2018, the difference between the two rates ranged from 17 to 20 percentage points. [5][10], The billionaire trader Israel Englander sponsored Yass for a seat on the Philadelphia Stock Exchange, and SIG was initially run from an office at the Exchange. Jeffrey 'Jeff' Yass is an American investor, co-founder of the Susquehanna International Group, and vice chairman of the libertarian-aligned think tank Cato Institute. Leaders of the Bala Cynwyd firm, long known for making quick, strategic pivots to increase profits, watched with fascination as sports analytics the use of digital plays-and-probabilities strategies similar to securities analysis gained popularity in the early 2010s following the release of Moneyball, the book and film that chronicled the success of the Oakland Athletics 2002 season using these tactics. ? 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