Susquehanna also owns about 15% of ByteDance, the tech firm that developed social media app TikTok, based on an October 2020 Wall Street Journal report and adjustments for dilution from subsequent funding rounds. Born in 1958 to two Queens CPAs, Yass said reading the economist Milton Friedmans Capitalism and Freedom as a young man delivered him from an early flirtation with socialism. Making new markets, he likes to say, is a mission from God.. Susquehanna does the same thing, but with securities. 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. The previous decade had seen a burst of academic interest in the financial instruments, including a pioneering model of how to more accurately price them. The bars show the portion of short-term capital losses and long-term capital gains from the Susquehanna Fundamental Investments partnership that flowed to Jeff Yass. In 2017, SIG launched Susquehanna Private Capital, LLC, which focuses on buyouts of middle market companies in the US, in industries such as aerospace, industrials, consumer, healthcare, and business and government services. 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. It was through that organization that he met famed economist Milton Friedman in the 1990s. COVID-19 - Business as Usual: In light of the on-going COVID-19 pandemic, SIG has implemented arrangements including remote working to ensure the safety of its staff and business continuity. Having slashed his income tax bills, Yass has already taken steps to protect his fortune from the government for years to come. More than 35 years after he was booted from the racetrack outside Chicago, Yass still lives to gamble. In 2017 it was $940 million in long-term gains and $902 million in short-term losses. In 2017, Susquehanna donated $200k to the Libertarian climate deniers at the Atlas Network, formerly Atlas Economic Research Foundation. SIG continues to provide liquidity with functions staffed as normal and clients able to liaise with their usual business contacts. Yass softens any impression of ruthlessness by deploying a practiced humility and comedic timing. One day in July 1985, three young men from Philadelphia, their lawyer and a burly Pinkerton guard arrived at a horse track outside Chicago carrying a briefcase with $250,000 in cash. During Susquehannas first summer, Yass group bet the stock market was overpriced; they collected big when it crashed that fall. He placed a second bet, now wagering against the exact same stocks in the exact same amounts hed just ordered from Credit Suisse. 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. Susquehanna Financial Group, LLLP (SFG), an affiliate of SIG, is a It has been a remarkably consistent profit machine for the partners, except in 2008, the year of the global financial crisis. But what is considered long-term involves a bright, arbitrary line. The company guides traders through a combination of practical training and ongoing theoretical classroom work to get them on the right track. The Bala Cynwyd, Pennsylvania-based company makes markets in financial products and asset classes with a focus on derivatives. Susquehanna quickly bounced back to profitability. President Trump announced on July 31, 2020, that he was considering banning TikTok in the United States. The group didnt mention Yass, but the ads attacked Biden on Yass pet issue, charter schools. Doris Burke is a senior research reporter at ProPublica. [15] In 2018 he donated $3.8m to the Club for Growth, and $20.7m in 2020. Each of the 50 lucky Susquehanna staffers gets to bring a guest. He created special trusts designed to sidestep the estate tax when passing money to heirs at death, court records show. 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. Yass and his partners refused, arguing that the firm had broken no rules, and sued the IRS in U.S. Tax Court in 2020. As Susquehanna grew, it added outposts in New York and around the world. Along with his college friends, Yass founded Susquehanna, named after the river that connects Binghamton to Pennsylvania, in 1987. (To inquire about syndication or licensing opportunities, contact. The loser was the U.S. government: Susquehanna had managed to slash its tax bill through the trade. Thank you for your interest in republishing this story. What you need to know about the richest man in Pennsylvania and how he spends his money. The agency demanded the firm pay tens of millions of dollars in back taxes. [4] He is the son of Gerald Yass, and his "childhood sweetheart" Sybil, who was at his bar mitzvah. According to Alphacaution Research **, Susquehanna accounted for nearly a . Several former employees told ProPublica that details of the firms tax strategy are closely guarded, even inside the company. One main engine of Yass' tax avoidance, ProPublica found, is a huge. Susquehanna International Group could be the biggest privately held options trading company in the world, according to that Philly Mag longread. In 1996, SIG started Heights Capital Management in San Francisco. One time, as recounted in Philadelphia magazine, traders bet on whether Yass could name the last Plantagenet king of England. At least two of Susquehannas other co-founders, Arthur Dantchik and Joel Greenberg, have each made billions of dollars themselves, according to ProPublica's analysis. More broadly, do you have expertise in tax law or accounting? [1], According to israeli newspaper Haaretz, he is a major supporter of the Israeli Far-Right. On its face, the fund actually lost money for Yass: Over eight years, it registered $5.4 billion in losses against $5 billion in gains a net loss before taxes. [12], As of 2018, the firm traded about 7 percent of U.S. ETF volume and more than $1.5 trillion in ETFs globally on an annual basis.[4]. Susquehanna also stands apart in how its taxes are prepared, ProPublicas records show. Instead of betting for and against a single stock, the firm bet for and against the entire market. Over several years, the funds disclosed positions resembled a complex version of the Coke trade. In 1985, he and his friends brought $250,000 to the racetrack in duffel bags. The Eagles are a narrow favorite to win the Super Bowl by less than two points, according to bookmakers who take sports bets from gamblers. Their large but unremarkable house could easily be the home of a successful doctor rather than one of the richest men in the country. 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. The young Philadelphia activists of Jewish Voice for Peace staged a sit-in in the lobby of the Susquehanna International Group demanding to speak to Yass and Dantchik about their funding of extremist infrastructure. COVID-19 - Business as Usual: In light of the on-going COVID-19 pandemic, SIG has implemented arrangements including remote working to ensure the safety of its staff and business continuity. Thanks for signing up. If youre the sixth-best poker player in the world and you play with the five best players, youre going to lose, he said. A week after Trump won the presidency that November, Yass took the stage at a theater in Philadelphia. (Greenberg retired in 2016.). 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. Doing this makes sense for a firm that specializes in short-term trading and doesnt expect to generate many long-term gains. Everyone bet on everything. Its okay to put our stories on pages with ads, but not ads specifically sold against our stories. Its hard to value private assets, which might not be publicly appraised or sold for years. Justin Elliott is a ProPublica reporter covering politics and government accountability. Some seem certain it will revolutionize the world, while others point out its difficult or inaccurate responses. He has given $15 million as the sole funder of a political action committee, the School Freedom Fund, that says school closures, mask mandates, critical race theory, and more have created a unique opportunity to promote School Choice as the structural solution to dramatically improve education in America.. This is a BETA experience. Susquehanna Financial Group (SFG): SIG's institutional broker-dealer business, which provides order execution and trading flow services, and equity research coverage of nearly 200 companies. In funding pro-Israel causes, Yass has help from his business partner in the Susquehanna International Group and fellow Keystone State billionaire, Arthur Dantchik. Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world. And its the instincts and skills he picked up along that path that ultimately led to his success with the firm. [11], SIG established Dublin-based Nellie Analytics in 2017 to focus on sports betting. Yass donations to Club for Growth were nothing new. Paul Kiel covers business and consumer finance for ProPublica. Then he returned to the East Coast and settled in Philadelphia, where he began trading options. (Backers of the ban cited national security concerns over Americans private data being controlled by the Chinese firm behind the app, ByteDance.) About 20 Susquehanna employees won tickets by lottery when the Phillies made the World Series last season, and firm members have previously won cash prizes for guessing Triple Crown and NCAA Final Four winners. Its not clear whether the IRS has ever challenged the firms trading inside Susquehanna Fundamental Investments. Hold a security for less than 366 days, and you are on the wrong side of that line. Yass and his colleagues focused first on stock and currency options trading, where money could be bet for a fraction of the shares value, with less up-front capital than traditional stock trading. Later that month, Yass gave the group another $5 million, and more ads ran against Biden. Whats Club for Growth? The corporation was founded by five others including Arthur Dantchik, another conservative donor. 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. 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 and his team used their numerical expertise to make rapid-fire computer-driven trades in options and other securities, eventually becoming a giant middleman in the markets for stocks and other securities. These firms voluntarily classify their trading activity as ordinary income, according to ProPublicas analysis of tax records. Its not like the stock options market, where someone in Kansas can trade with someone in Delaware. In 2018, his Susquehanna Foundation dolled out $10k to the National Brain Tumor Society, $1 million to Long Island University and $50k to Philadelphia City Rowing. Yass made his foray into options trading while studying at NYU business school before being offered a chance to work on the Philadelphia Stock Exchange. He has spent more than $100 million on election campaigns in recent years. But do you know the story of how Susquehanna got started? and each individual billionaire profile contains a detailed analysis of how that person's fortune is tallied. The 50 winners were selected by a lottery, held last fall when the Eagles were 5-0 and the Super Bowl began to look possible. 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