… to continue to violate laws with impunity. Here are three headlines that crossed my desk this morning:
(1) Hedge fund Renaissance Technologies has been accused of misusing complex financial structures, with the help of Barclays and Deutsche Bank, to avoid paying more than $6bn in US taxes, the Senate Permanent Subcommittee on Investigations said on Monday.
Renaissance is said to have made $34bn in trading profits, while the banks reportedly took more than $1bn in fees, by characterising the gains as long-term capital gains that avoided bigger tax bills, according to the year-long investigation by the subcommittee. Executives of the companies are set to testify before the Senate on Tuesday. [Link]
(2) Clients are fleeing Barclays’ “dark pool” in the wake of a US lawsuit alleging the UK bank misled them about high frequency activity in its private trading venue.
Barclays has fallen from second to 12th place in terms of volumes traded in US dark pools after news of the lawsuit emerged. The rapid decline means the group now lags behind rivals such as UBS, Merrill Lynch, Deutsche Bank, Morgan Stanley, Goldman Sachs and JPMorgan, as it faces intense scrutiny over its management of its LX platform. – Looks like others are still operating dark pools. [Link]
(3) The U.K.’s Serious Fraud Office is gathering information about possible rigging of the foreign-exchange market, the latest sign of the seriousness of the global probe into currencies trading. [Link]
(4) On their part, hedge funds appear unable to make money except through tax dodge, evasion and insider trading. [Link]
This is why it makes sense to abolish these casinos (otherwise known as financial markets) and go back to old, traditional boring bank lending. At the minimum, governments should raise sufficient public (tax) resources out of their activities (because they are a very public nuisance and not public utility and because they cannot seem to be able to keep their hands off the vice jar).