Renaissance Technologies (RENTEC) is the second largest hedge fund in the US, managing $45 billion in assets. It has a reputation for being the most successful hedge fund in history, for using quantitative trading strategies designed by top scientists, and for being extremely secretive.Publicly available information on RENTEC implies that the firm is a massive money laundering tool disguised as a hedge fund, operating on behalf of Vladimir PUTIN.
BACKGROUND
Money laundering involves a transaction where illicit money is spent by one party, producing a seemingly legitimate profit for another party. Ostensibly the two parties are unrelated, but in reality, both parties are closely connected. The money laundering process can be summarized in three steps: • SOURCE Secure illegally sourced funds. • TRANSACT Illegal money is used in a transaction, resulting in profits for another party. • COVER UP The true nature of the transaction is visible only to insiders. Evidence suggests money laundering via financial markets works like this: • SOURCE Criminal organization invests in a hedge fund (Fund A) operating in a market with a high degree of corruption (for example Russia). • TRANSACT On behalf of Fund A, an international bank purchases a security in the corrupted market. The bank then sells(i.e. shorts) the same security in a second developed market (for example the UK), and forwards the proceeds to Fund B. Both funds are owned by the same criminal organization. • COVER UP The nature of the transactions are obfuscated with advanced financial techniques and the inner workings of the fund are kept secret. A significant degree of sophistication is required to launder money in plain sight via financial markets. Due to this sophistication, it’s unlikely direct evidence will come to light without access to internal records. However, by using other cases as a guide, the following mosaic of indirect evidence will likely be found: • SOURCE Key people are connected to criminal organizations via one or more intermediaries. • TRANSACT An abnormally high rate of return that allows significant amounts of money to be laundered in a short amount of time. Evidence of buying and selling the same securities in different markets. • COVER UP History of using financial engineering to hide the nature of transactions and a reputation for extreme secrecy.
SOURCE
Russia is controlled by a vast organization comprised of the intelligence services, organized crime and big business. This organization is led by Vladimir PUTIN and control is maintained through corruption, blackmail and assassination. (1)Because of the high degree of control PUTIN has over Russian centers of power, all Russians in positions of influence should be assumed to have at least PUTIN’s blessing. Any persons significantly connected with these Russians are likely contributing to PUTIN’s goals either witting or otherwise.
Robert MERCER is co-CEO of RENTEC.MERCER is the largest financial backer of Donald TRUMP’s presidential campaign, and an influential funder of Republicans and conservatives causes including Citizens United. (2)
MERCER invested in data science firm CAMBRIDGE ANALYTICA. MERCER insisted TRUMP campaign hire CAMBRIDGE ANALYTICA to design its social media strategy. Through CAMBRIDGE ANALYTICA and its owner Vincent TCHENGUIZ, MERCER is connected to PUTIN protégé Dmitry FIRTASH and Russian Intelligence Services (RIS). (3, 4)
March 2017 MERCER’s yacht the ‘Sea Owl’ was spotted in the British Virgin Islands, anchored next to Dmitry RYBOLOVLEV’s yacht the ‘Anna.’ RYBOLOVLEV is a member of PUTIN’s inner circle and likely his personal courier. (5)
MERCER is part owner of BREITBART news. The FBI is investigating BREITBART and CAMBRIDGE ANALYTICA for cooperating with RIS during the 2016 US election. Evidence suggests that CAMBRIDGE ANALYTICA and BREITBART used information warfare techniques in cooperation with RIS to support TRUMP and attack Hillary CLINTON. (3, 6, 7)
Several of RENTEC’S Russian born employees have been in the news:
• In the late 1990s Alexey KONONENKO was given a prominent role within RENTEC’s equities group. His rapid promotion was questioned by colleagues and characterized as a “power play.” (8)
• In 2001 RENTEC sued two Russian employees Alexander BELOPOLSKY & Pavel VOLFBEYN for intellectual property theft after they left for rival fund Millennium Partners. (8)
• In 2006 Alexander ASTASHKEVICH shot and killed his wife and himself. (9)
Prior to starting RENTEC in 1982, the firm’s founder Jim SIMONS was a cryptologist, contracted to the NSA. Like Edward SNOWDEN, SIMONS would have been a valued target for recruitment by RIS. (10)
2014 RENTEC received media attention for increasing its holding in Russian telecom company VIMPLECOM. Newsworthy because the stock was dropping following Russia’s annexation of Crimea. In 2016 RENTEC further increased its holding in VIMPLECOM by 438%. VIMPLECOM is controlled by PUTIN insider Mikhail FRIDMAN. (11)
TRANSACT In the past 20 years the average hedge fund returned 9% per year. In the same period RENTEC’s “MEDALLION” fund averaged 40%. After twenty years, one-thousand dollars invested in the average hedge fund would be worth nearly six-thousand dollars, the same investment made in MEDALLION would be worthover eight hundred-thousand dollars. (22)
RENTEChas long claimed that it must limit the size of its MEDALLIONfund (most recently at $10 billion) in order to preserve its high rates of return. So, it was newsworthy when shortly after the election of Donald TRUMP the firm announced that it would be increasing the fund’s size by fifty percent and that employees would only have several weeks to raise additional funds. This would increase the fund to $15 billion and at current rates of return would produce a profit of $6 billion in 2017.In normal years virtually all profits of the fund are returned to investors instead of being re-invested. This unusual degree of cash returned to investors could be used to facilitate money laundering. (22)
Hedge funds are normally secretive in order to prevent competitors from copying their investment strategies. However, RENTEC is not only secretive about its strategies, but also about its financial position and executive compensation. For this reason, very little is known about internal workings of the firm. What can be pieced together is RENTEC uses quantitative models to buy and sell millions of stocks a year based on statistical ARBITRAGE strategies.Statistical ARBITRAGE attempts to make money by buying one security and selling another. These securities could be similar stocks in the same industry, or the same security trading in different markets.
COVER UP
In 2017 DEUTSCHE BANK was fined $425 million by the US government for laundering $10 billion out of RUSSIA using a scheme known as MIRROR TRADES. The scheme involved a customer in Moscow ordering DEUTSCHE BANKto buy shares for Rubles and then to immediately sell an identical amount of the same shares in London for Dollars. (14)
The money used in the scheme belonged to Igor Putin (cousin of Vladimir PUTIN) and the ROTENBERG brothers who are old friends of PUTIN. Investigators speculated that MIRROR TRADES where a part of a much larger money laundering operation but to date no additional evidence has been made public. To outsiders MIRROR TRADES are nearly indistinguishable from ARBITRAGE. (14)
MIRROR TRADES were kept under the radar by trading “over the counter”, and through a remote booking feature that did not require direct participation of the London office. Records showing losses at the end of the trading day would mysteriously show zero losses at the beginning of the next day. This strongly indicates traders were JOURNALING assets (moving assets between accounts) in order to make up for losses in one account with gains from another. (14, 15)
RENTECis currently under investigation by the IRS for using a similar financial engineering structure to MIRROR TRADES known as BASKET OPTIONS (an option containing many different securities). Congressional investigators have claimed BASKET OPTIONS were used to avoid taxes and limitations on leverage, but they could also be used to facilitate money laundering.On behalf of the MEDALLIONfund, RENTEC purchased an option from DEUTSCHE BANK and then sold theoptionone year later and claimed the long-term tax rate (24%) applied. In reality RENTEC exercised full control of the contents of the option, and executed hundreds of millions of high frequency transactions a year, most lasting only milliseconds. (16, 17)
If the IRS finds that RENTEC should be charged the short-term tax rate (44%), the fund will owe $6.8 billion.2017 McClatchy reported on the investigation and specifically linked the possible tax bill with the increasing investments in political candidates made by RENTEC executives.
Two weeks after the report was published the author Scott CHRISTIANSON died from massive head trauma at his home. (16, 18)
Evidence presented to US Congressional committee investigating RENTEC show thatDEUTSCHE BANK allowed RENTEC to JOURNAL assets between sub accounts, thereby avoiding market transactions of buying and repurchasing the same security that could be interpreted as manipulative trading.Other evidence included emails from William BROEKSMIT, the DEUTSCHE BANK employee charged with managing the BASKET OPTIONS for RENTEC where he went into detail how the scheme was executed.
In 2014 BROEKSMIT was found dead in his London apartment as result of hanging. (16, 19)
RENTEC is also currently under investigation by the Commodity Futures Trading Commission. RENTEC has resisted calls from the agency to hand over source code that runs MEDALLION’s trading algorithms. (20)
RENTEC manages three separate funds, two of these funds are available to outside investors. The third fund is the highly secretive MEDALLION and only accepts money from RENTEC employees. Records show that only five executives own seventy percent of the fund. In 2009, investors in the public funds were unhappy that MEDALLION’s returns far exceeded returns of their investments. These complaints led to an SEC investigation. SIMONS took the blame and resigned, making MERCER co-CEO together with IBM colleague and former roommate Peter BROWN. (21, 23)
CONCLUSION The preceding sections demonstrate RENTEC has connections with Russian elites, produces extremely high rates of return via ARBITRAGE transactions, and engages in financial engineering techniques that are functionally equivalent to known money laundering methods. These are all red flags that imply RENTEC is involved in money laundering on behalf of Vladimir PUTIN.
The evidence suggests that RENTEC is a massive Russian money laundering operation hiding under the guise of a highly successful hedge fund. The scheme functions similar to MIRROR TRADES where shares are purchased in Moscow, immediately sold by RENTEC in the US, recorded as RENTEC’s profit, and the shares JOURNALED between US and Moscow accounts by DEUTSCHE BANK. RENTEC hides this scheme by executing hundreds of millions of trades a year, by using BASKET OPTIONS, and by limiting investment of the fund to RENTEC insiders. Every year RENTEC is capable of washing funds equal to the annual profits of its MEDALLIONfund which are estimated at $6 billion this year.
For this scheme to be successful, all senior RENTEC leadership would have been involved including MERCER and SIMONS.In the 2016 election cycle MERCER spent $15 million on Republican candidates with the majority going towards supporting Donald TRUMP. In the same year SIMONS also spent $15 million, but on Democratic candidates, much of it going towards Hillary CLINTON. Regardless of the election result, PUTIN was guaranteed to have an agent with significant influence on the President of the United States. q@q502q502
1. Fiona Hill, Mr. Putin: Operative in the Kremlin, 2015 2. Jane Mayer, The Reclusive Hedge-Fund Tycoon Behind the Trump Presidency, The New Yorker, 2017 3. Carole Cadwalladr, Robert Mercer: the big data billionaire waging war on mainstream media, The Gaurdian, 2017 4. Ann Marlowe, WILL DONALD TRUMP’S DATA-ANALYTICS COMPANY ALLOW RUSSIA TO ACCESS RESEARCH ON U.S. CITIZENS?, Tablet, 2016 5. John Pacenti, Yachts of Trump financial backer, Russian oligarch seen close together, My Palm Beach Post, 2017 6. Kate Brannen, DID RUSSIANS TARGET DEMOCRATIC VOTERS, WITH KUSHNER’S HELP?, Newsweek, 2017 7. Daniel Halper, Breitbart and InfoWars are drawn into FBI’s Russian bot probe, NY Post, 2017 8. Katherine Burton, Inside a Moneymaking Machine Like No Other, Bloomberg, 2016 9. Kieran Crowley, TRAGIC SIBERIA ‘EXILE’ — FOR SLAY-SUICIDE BOY, NY Post, 2017 10. wikipedia.org/wiki/James_Harris_Simons 11. Jesse Solomon, What geopolitical risk? Hedge funds bet on Russia, CNN Money, 2014 12. Richard Rubin, How an Exclusive Hedge Fund Turbocharged Its Retirement Plan, Bloomberg, 2015 13. Nathan Vardi, Renaissance And Two Sigma, Growing At Stunning Pace, Now Nation’s 2nd Biggest Hedge Funds, Forbes, 2017 14. Ed Caesar, Deutsche Bank’s $10-Billion Scandal, The New Yorker, 2016 15. NY ST DEPARTMENT OF FINANCIAL SERVICES, In the Matter of DEUTSCHE BANK AG and DEUTSCHE BANK AG NEW YORK BRANCH, 2017 16. Scott Christianson, Billionaire Robert Mercer did Trump a huge favor. Will he get a payback?, McClatchy, 2017 17. US Senate PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, ABUSE OF STRUCTURED FINANCIAL PRODUCTS, 2014 18. Casey Seiler, Scott Christianson, 69, acclaimed journalist, author and advocate, Times Union, 2017 19. Michael Gray, Why are so many bankers committing suicide?, NY Post, 2017 20. Kevin Dugan, Quant fund is concerned about CFTC getting its software code, NY Post, 2017 21. Mariah Blake, Why Are These Hedge Fund Kingpins Dumping Millions Into the Midterms?, Mother Jones, 2014 22. Miles Weiss, Renaissance’s Medallion Made a Stunning Shift After Trump’s Election, Bloomberg, 2017 23. Pamela Roux, Is Trump Backer Robert Mercer a Billionaire? I Tried to Find Out, Bloomberg, 2017
repost
ROBERT MERCER :—
MONEY LAUNDERER FOR
VLADIMIR PUTIN
Renaissance Technologies (RENTEC) is the second largest hedge fund in the US, managing $45 billion in assets. It has a reputation for being the most successful hedge fund in history, for using quantitative trading strategies designed by top scientists, and for being extremely secretive.Publicly available information on RENTEC implies that the firm is a massive money laundering tool disguised as a hedge fund, operating on behalf of Vladimir PUTIN.
BACKGROUND
Money laundering involves a transaction where illicit money is spent by one party, producing a seemingly legitimate profit for another party. Ostensibly the two parties are unrelated, but in reality, both parties are closely connected. The money laundering process can be summarized in three steps: • SOURCE Secure illegally sourced funds. • TRANSACT Illegal money is used in a transaction, resulting in profits for another party. • COVER UP The true nature of the transaction is visible only to insiders. Evidence suggests money laundering via financial markets works like this: • SOURCE Criminal organization invests in a hedge fund (Fund A) operating in a market with a high degree of corruption (for example Russia). • TRANSACT On behalf of Fund A, an international bank purchases a security in the corrupted market. The bank then sells(i.e. shorts) the same security in a second developed market (for example the UK), and forwards the proceeds to Fund B. Both funds are owned by the same criminal organization. • COVER UP The nature of the transactions are obfuscated with advanced financial techniques and the inner workings of the fund are kept secret. A significant degree of sophistication is required to launder money in plain sight via financial markets. Due to this sophistication, it’s unlikely direct evidence will come to light without access to internal records. However, by using other cases as a guide, the following mosaic of indirect evidence will likely be found: • SOURCE Key people are connected to criminal organizations via one or more intermediaries. • TRANSACT An abnormally high rate of return that allows significant amounts of money to be laundered in a short amount of time. Evidence of buying and selling the same securities in different markets. • COVER UP History of using financial engineering to hide the nature of transactions and a reputation for extreme secrecy.
SOURCE
Russia is controlled by a vast organization comprised of the intelligence services, organized crime and big business. This organization is led by Vladimir PUTIN and control is maintained through corruption, blackmail and assassination. (1)Because of the high degree of control PUTIN has over Russian centers of power, all Russians in positions of influence should be assumed to have at least PUTIN’s blessing. Any persons significantly connected with these Russians are likely contributing to PUTIN’s goals either witting or otherwise.
Robert MERCER is co-CEO of RENTEC.MERCER is the largest financial backer of Donald TRUMP’s presidential campaign, and an influential funder of Republicans and conservatives causes including Citizens United. (2)
MERCER invested in data science firm CAMBRIDGE ANALYTICA. MERCER insisted TRUMP campaign hire CAMBRIDGE ANALYTICA to design its social media strategy. Through CAMBRIDGE ANALYTICA and its owner Vincent TCHENGUIZ, MERCER is connected to PUTIN protégé Dmitry FIRTASH and Russian Intelligence Services (RIS). (3, 4)
March 2017 MERCER’s yacht the ‘Sea Owl’ was spotted in the British Virgin Islands, anchored next to Dmitry RYBOLOVLEV’s yacht the ‘Anna.’ RYBOLOVLEV is a member of PUTIN’s inner circle and likely his personal courier. (5)
MERCER is part owner of BREITBART news. The FBI is investigating BREITBART and CAMBRIDGE ANALYTICA for cooperating with RIS during the 2016 US election. Evidence suggests that CAMBRIDGE ANALYTICA and BREITBART used information warfare techniques in cooperation with RIS to support TRUMP and attack Hillary CLINTON. (3, 6, 7)
Several of RENTEC’S Russian born employees have been in the news:
• In the late 1990s Alexey KONONENKO was given a prominent role within RENTEC’s equities group. His rapid promotion was questioned by colleagues and characterized as a “power play.” (8)
• In 2001 RENTEC sued two Russian employees Alexander BELOPOLSKY & Pavel VOLFBEYN for intellectual property theft after they left for rival fund Millennium Partners. (8)
• In 2006 Alexander ASTASHKEVICH shot and killed his wife and himself. (9)
Prior to starting RENTEC in 1982, the firm’s founder Jim SIMONS was a cryptologist, contracted to the NSA. Like Edward SNOWDEN, SIMONS would have been a valued target for recruitment by RIS. (10)
2014 RENTEC received media attention for increasing its holding in Russian telecom company VIMPLECOM. Newsworthy because the stock was dropping following Russia’s annexation of Crimea. In 2016 RENTEC further increased its holding in VIMPLECOM by 438%. VIMPLECOM is controlled by PUTIN insider Mikhail FRIDMAN. (11)
TRANSACT In the past 20 years the average hedge fund returned 9% per year. In the same period RENTEC’s “MEDALLION” fund averaged 40%. After twenty years, one-thousand dollars invested in the average hedge fund would be worth nearly six-thousand dollars, the same investment made in MEDALLION would be worthover eight hundred-thousand dollars. (22)
RENTEChas long claimed that it must limit the size of its MEDALLIONfund (most recently at $10 billion) in order to preserve its high rates of return. So, it was newsworthy when shortly after the election of Donald TRUMP the firm announced that it would be increasing the fund’s size by fifty percent and that employees would only have several weeks to raise additional funds. This would increase the fund to $15 billion and at current rates of return would produce a profit of $6 billion in 2017.In normal years virtually all profits of the fund are returned to investors instead of being re-invested. This unusual degree of cash returned to investors could be used to facilitate money laundering. (22)
Hedge funds are normally secretive in order to prevent competitors from copying their investment strategies. However, RENTEC is not only secretive about its strategies, but also about its financial position and executive compensation. For this reason, very little is known about internal workings of the firm. What can be pieced together is RENTEC uses quantitative models to buy and sell millions of stocks a year based on statistical ARBITRAGE strategies.Statistical ARBITRAGE attempts to make money by buying one security and selling another. These securities could be similar stocks in the same industry, or the same security trading in different markets.
COVER UP
In 2017 DEUTSCHE BANK was fined $425 million by the US government for laundering $10 billion out of RUSSIA using a scheme known as MIRROR TRADES. The scheme involved a customer in Moscow ordering DEUTSCHE BANKto buy shares for Rubles and then to immediately sell an identical amount of the same shares in London for Dollars. (14)
The money used in the scheme belonged to Igor Putin (cousin of Vladimir PUTIN) and the ROTENBERG brothers who are old friends of PUTIN. Investigators speculated that MIRROR TRADES where a part of a much larger money laundering operation but to date no additional evidence has been made public. To outsiders MIRROR TRADES are nearly indistinguishable from ARBITRAGE. (14)
MIRROR TRADES were kept under the radar by trading “over the counter”, and through a remote booking feature that did not require direct participation of the London office. Records showing losses at the end of the trading day would mysteriously show zero losses at the beginning of the next day. This strongly indicates traders were JOURNALING assets (moving assets between accounts) in order to make up for losses in one account with gains from another. (14, 15)
RENTECis currently under investigation by the IRS for using a similar financial engineering structure to MIRROR TRADES known as BASKET OPTIONS (an option containing many different securities). Congressional investigators have claimed BASKET OPTIONS were used to avoid taxes and limitations on leverage, but they could also be used to facilitate money laundering.On behalf of the MEDALLIONfund, RENTEC purchased an option from DEUTSCHE BANK and then sold theoptionone year later and claimed the long-term tax rate (24%) applied. In reality RENTEC exercised full control of the contents of the option, and executed hundreds of millions of high frequency transactions a year, most lasting only milliseconds. (16, 17)
If the IRS finds that RENTEC should be charged the short-term tax rate (44%), the fund will owe $6.8 billion.2017 McClatchy reported on the investigation and specifically linked the possible tax bill with the increasing investments in political candidates made by RENTEC executives.
Two weeks after the report was published the author Scott CHRISTIANSON died from massive head trauma at his home. (16, 18)
Evidence presented to US Congressional committee investigating RENTEC show thatDEUTSCHE BANK allowed RENTEC to JOURNAL assets between sub accounts, thereby avoiding market transactions of buying and repurchasing the same security that could be interpreted as manipulative trading.Other evidence included emails from William BROEKSMIT, the DEUTSCHE BANK employee charged with managing the BASKET OPTIONS for RENTEC where he went into detail how the scheme was executed.
In 2014 BROEKSMIT was found dead in his London apartment as result of hanging. (16, 19)
RENTEC is also currently under investigation by the Commodity Futures Trading Commission. RENTEC has resisted calls from the agency to hand over source code that runs MEDALLION’s trading algorithms. (20)
RENTEC manages three separate funds, two of these funds are available to outside investors. The third fund is the highly secretive MEDALLION and only accepts money from RENTEC employees. Records show that only five executives own seventy percent of the fund. In 2009, investors in the public funds were unhappy that MEDALLION’s returns far exceeded returns of their investments. These complaints led to an SEC investigation. SIMONS took the blame and resigned, making MERCER co-CEO together with IBM colleague and former roommate Peter BROWN. (21, 23)
CONCLUSION The preceding sections demonstrate RENTEC has connections with Russian elites, produces extremely high rates of return via ARBITRAGE transactions, and engages in financial engineering techniques that are functionally equivalent to known money laundering methods. These are all red flags that imply RENTEC is involved in money laundering on behalf of Vladimir PUTIN.
The evidence suggests that RENTEC is a massive Russian money laundering operation hiding under the guise of a highly successful hedge fund. The scheme functions similar to MIRROR TRADES where shares are purchased in Moscow, immediately sold by RENTEC in the US, recorded as RENTEC’s profit, and the shares JOURNALED between US and Moscow accounts by DEUTSCHE BANK. RENTEC hides this scheme by executing hundreds of millions of trades a year, by using BASKET OPTIONS, and by limiting investment of the fund to RENTEC insiders. Every year RENTEC is capable of washing funds equal to the annual profits of its MEDALLIONfund which are estimated at $6 billion this year.
For this scheme to be successful, all senior RENTEC leadership would have been involved including MERCER and SIMONS.In the 2016 election cycle MERCER spent $15 million on Republican candidates with the majority going towards supporting Donald TRUMP. In the same year SIMONS also spent $15 million, but on Democratic candidates, much of it going towards Hillary CLINTON. Regardless of the election result, PUTIN was guaranteed to have an agent with significant influence on the President of the United States. q@q502q502
1. Fiona Hill, Mr. Putin: Operative in the Kremlin, 2015 2. Jane Mayer, The Reclusive Hedge-Fund Tycoon Behind the Trump Presidency, The New Yorker, 2017 3. Carole Cadwalladr, Robert Mercer: the big data billionaire waging war on mainstream media, The Gaurdian, 2017 4. Ann Marlowe, WILL DONALD TRUMP’S DATA-ANALYTICS COMPANY ALLOW RUSSIA TO ACCESS RESEARCH ON U.S. CITIZENS?, Tablet, 2016 5. John Pacenti, Yachts of Trump financial backer, Russian oligarch seen close together, My Palm Beach Post, 2017 6. Kate Brannen, DID RUSSIANS TARGET DEMOCRATIC VOTERS, WITH KUSHNER’S HELP?, Newsweek, 2017 7. Daniel Halper, Breitbart and InfoWars are drawn into FBI’s Russian bot probe, NY Post, 2017 8. Katherine Burton, Inside a Moneymaking Machine Like No Other, Bloomberg, 2016 9. Kieran Crowley, TRAGIC SIBERIA ‘EXILE’ — FOR SLAY-SUICIDE BOY, NY Post, 2017 10. wikipedia.org/wiki/James_Harris_Simons 11. Jesse Solomon, What geopolitical risk? Hedge funds bet on Russia, CNN Money, 2014 12. Richard Rubin, How an Exclusive Hedge Fund Turbocharged Its Retirement Plan, Bloomberg, 2015 13. Nathan Vardi, Renaissance And Two Sigma, Growing At Stunning Pace, Now Nation’s 2nd Biggest Hedge Funds, Forbes, 2017 14. Ed Caesar, Deutsche Bank’s $10-Billion Scandal, The New Yorker, 2016 15. NY ST DEPARTMENT OF FINANCIAL SERVICES, In the Matter of DEUTSCHE BANK AG and DEUTSCHE BANK AG NEW YORK BRANCH, 2017 16. Scott Christianson, Billionaire Robert Mercer did Trump a huge favor. Will he get a payback?, McClatchy, 2017 17. US Senate PERMANENT SUBCOMMITTEE ON INVESTIGATIONS, ABUSE OF STRUCTURED FINANCIAL PRODUCTS, 2014 18. Casey Seiler, Scott Christianson, 69, acclaimed journalist, author and advocate, Times Union, 2017 19. Michael Gray, Why are so many bankers committing suicide?, NY Post, 2017 20. Kevin Dugan, Quant fund is concerned about CFTC getting its software code, NY Post, 2017 21. Mariah Blake, Why Are These Hedge Fund Kingpins Dumping Millions Into the Midterms?, Mother Jones, 2014 22. Miles Weiss, Renaissance’s Medallion Made a Stunning Shift After Trump’s Election, Bloomberg, 2017 23. Pamela Roux, Is Trump Backer Robert Mercer a Billionaire? I Tried to Find Out, Bloomberg, 2017
Reproduced by kind permission:Please refer to the reference sections for all credits.
[The views expressed in this article do not necessarily represent the views of this website.]
4 ThingsWestern Democracies Need to Understand to Stop Hostile Kremlin Meddling:
Governments should use the free press to their advantage by openly investigating disinformation campaigns.
By Jakub Janda • 05/11/17
In 2015, I started the Kremlin Watch Program at a think-tank in Prague. My team analyzes Russian influence and disinformation operations, and we have helped the Czech government tailor a national strategy. We publish papers, propose strategies, and have been invited to consult in 16 countries—mostly European—so far. These are four lessons I have learned from my experience.#1. Putin’s regime wants to call itself a superpower and to be respected as such.Apart from having nuclear weapons and large territory, Russia has nothing thatmakes it anything more than a regional dictatorship with living standards of adeveloping country. Freedom of speech in Russia is worse than in Zimbabwe, political opponents are shot or poisoned, journalists are assassinated, history is systematically falsified, and most major media outlets are controlled by the regime. Putin suppresses domestic opposition—from both political groups and independent media—because he has failed to deliver solid living standards for ordinary Russians over the course of the 17 years he has ruled.Russia has a lower GDP than Italy, and its average wages are lower thanRomania’s.
On the international stage, there isn’t much to respect Russia for—apart from its status of a doping superpower; its occupation of Ukraine, Georgia and Moldova; and its covering up for bloody dictators like Syrian President Bashar al-Assad. Western leftists need to wake up from their naïve dream of Russia being a champion of socialist ideals, and Western rightists should recognize that Russia is not a champion of conservative values; it suppresses individual freedoms and has the highest abortion rate in the world.
Putin’s regime kills and bullies to get respected. Democracies need to denounce this paradigm. It worked at the end of 1980s, and it will work again if we stop buying into the Soviet dictatorship’s fear game.
White House, Oval Office. Donald Trump between Russian Foreign Minister Lavrov and Russian Ambassador Kislyak (May 2017). #2. Moscow is still dangerous. Knowing it is militarily inferior to NATO, Russia uses cowards’ weapons: disinformation operations and political subversion. There are countries that had no problem selling parts of their sovereignty to Moscow. For example, the Kremlin practically owns a majority of the Serbian national energy supply. Or it openly pays Marine Le Pen for her presidency bid. The fact that she received major campaign donations from a bloody foreign dictator who occupies territories of European countries didn’t discredit her in the eyes of the French public.
Then, there are politicians who turned a blind eye to the Kremlin’s activities—and now they are surprised. Democrats in the United States have long ignored Kremlin influence operations, until it hit them hard in the fall of 2016—a fate similar to the French left’s. Conservatives in the U.K. have held hawkish positions on Russia’s aggressive steps in Eastern Europe, but they basically tolerated harboring Russian dirty money in London.
“Monsieur Poutine, j’ai encore besoin d’argent… ! ». Front National presidential candidate Marina Le Pen in Moscow (May 2017). #3. Disinformation operations are a real and urgent threat to democracies worldwide. Once the political leadership recognizes this, the security apparatus gets the green light to develop detailed policy measures to protect the country. That’s what’s happening now in Germany, Czech Republic, Sweden and Finland, but the Baltic states have known this for decades. Moreover, once the government starts addressing this threat publicly, the media will make it a national issue. TV shows will elaborate on what disinformation look like, and major outlets will assign top investigators to research Kremlin proxy financing of local extremists or disinformation outlets. This autoimmune response needs to be launched by the government. Otherwise, only several isolated think tanks and patriotic journalists will dig into the subject, as is currently the case Slovakia, Hungary and France.
#4. We need to be resolute in defending our own countries. The word “sovereignty” has been hijacked by the far-right to kick against the EU. We need to take it back. What else is an assault on your sovereignty then Russia orchestrating an assassination attempt on a prime minister, as it did in Montenegro? How many thousands of Ukrainians need to die while defending their own territory from Kremlin-commanded terrorists, before the U. S. provides them with Javelins to make Ukraine a Russian-tank-free zone? How long will it take European intelligence agencies to declare hostile disinformation outlets a national security threat and until their financing and personnel will be investigated and made public, a proven Estonian counterintelligence practice? How long will it take Western governments to start taking Kremlin clandestine money in the West as leverage to make Putin’s regime get out of Ukraine and stop hostile meddling into domestic affairs of our democracies? How long will it take the top EU security and foreign policy official, Federica Mogherini, before she starts taking Russian disinformation campaigns seriously? What else must Russia do before Germans understand that voluntarily increasing dependence on Kremlin energies by Nord Stream 2 is not a rational thing, no matter how many former chancellors can Putin buy to work on his behalf? What else is sovereignty than citizens having the right to decide their leaders in fair elections free of hostile foreign interference, including hacks of candidates that Moscow doesn’t like?
Jakub Janda is Head of Kremlin Watch Program and Deputy Director at the European Values Think-Tank based in Prague. He specializes in response of democratic states to hostile disinformation and influence operations. In 2016, he was tasked by Czech security and intelligence institutions to consult on “Influence of Foreign Powers” chapter within Audit of National Security conducted by the Czech government. Follow him on Twitter @_jakubjanda
Reproduced by kind permission:Please refer to the reference sections for all credits.
[The views expressed in this article do not necessarily represent the views of this website.]
4 ThingsWestern Democracies Need to Understand to Stop Hostile Kremlin Meddling:
Governments should use the free press to their advantage by openly investigating disinformation campaigns.
By Jakub Janda • 05/11/17
In 2015, I started the Kremlin Watch Program at a think-tank in Prague. My team analyzes Russian influence and disinformation operations, and we have helped the Czech government tailor a national strategy. We publish papers, propose strategies, and have been invited to consult in 16 countries—mostly European—so far. These are four lessons I have learned from my experience.#1. Putin’s regime wants to call itself a superpower and to be respected as such.Apart from having nuclear weapons and large territory, Russia has nothing thatmakes it anything more than a regional dictatorship with living standards of adeveloping country. Freedom of speech in Russia is worse than in Zimbabwe, political opponents are shot or poisoned, journalists are assassinated, history is systematically falsified, and most major media outlets are controlled by the regime. Putin suppresses domestic opposition—from both political groups and independent media—because he has failed to deliver solid living standards for ordinary Russians over the course of the 17 years he has ruled.Russia has a lower GDP than Italy, and its average wages are lower thanRomania’s.
On the international stage, there isn’t much to respect Russia for—apart from its status of a doping superpower; its occupation of Ukraine, Georgia and Moldova; and its covering up for bloody dictators like Syrian President Bashar al-Assad. Western leftists need to wake up from their naïve dream of Russia being a champion of socialist ideals, and Western rightists should recognize that Russia is not a champion of conservative values; it suppresses individual freedoms and has the highest abortion rate in the world.
Putin’s regime kills and bullies to get respected. Democracies need to denounce this paradigm. It worked at the end of 1980s, and it will work again if we stop buying into the Soviet dictatorship’s fear game.
White House, Oval Office. Donald Trump between Russian Foreign Minister Lavrov and Russian Ambassador Kislyak (May 2017). #2. Moscow is still dangerous. Knowing it is militarily inferior to NATO, Russia uses cowards’ weapons: disinformation operations and political subversion. There are countries that had no problem selling parts of their sovereignty to Moscow. For example, the Kremlin practically owns a majority of the Serbian national energy supply. Or it openly pays Marine Le Pen for her presidency bid. The fact that she received major campaign donations from a bloody foreign dictator who occupies territories of European countries didn’t discredit her in the eyes of the French public.
Then, there are politicians who turned a blind eye to the Kremlin’s activities—and now they are surprised. Democrats in the United States have long ignored Kremlin influence operations, until it hit them hard in the fall of 2016—a fate similar to the French left’s. Conservatives in the U.K. have held hawkish positions on Russia’s aggressive steps in Eastern Europe, but they basically tolerated harboring Russian dirty money in London.
“Monsieur Poutine, j’ai encore besoin d’argent… ! ». Front National presidential candidate Marina Le Pen in Moscow (May 2017). #3. Disinformation operations are a real and urgent threat to democracies worldwide. Once the political leadership recognizes this, the security apparatus gets the green light to develop detailed policy measures to protect the country. That’s what’s happening now in Germany, Czech Republic, Sweden and Finland, but the Baltic states have known this for decades. Moreover, once the government starts addressing this threat publicly, the media will make it a national issue. TV shows will elaborate on what disinformation look like, and major outlets will assign top investigators to research Kremlin proxy financing of local extremists or disinformation outlets. This autoimmune response needs to be launched by the government. Otherwise, only several isolated think tanks and patriotic journalists will dig into the subject, as is currently the case Slovakia, Hungary and France.
#4. We need to be resolute in defending our own countries. The word “sovereignty” has been hijacked by the far-right to kick against the EU. We need to take it back. What else is an assault on your sovereignty then Russia orchestrating an assassination attempt on a prime minister, as it did in Montenegro? How many thousands of Ukrainians need to die while defending their own territory from Kremlin-commanded terrorists, before the U. S. provides them with Javelins to make Ukraine a Russian-tank-free zone? How long will it take European intelligence agencies to declare hostile disinformation outlets a national security threat and until their financing and personnel will be investigated and made public, a proven Estonian counterintelligence practice? How long will it take Western governments to start taking Kremlin clandestine money in the West as leverage to make Putin’s regime get out of Ukraine and stop hostile meddling into domestic affairs of our democracies? How long will it take the top EU security and foreign policy official, Federica Mogherini, before she starts taking Russian disinformation campaigns seriously? What else must Russia do before Germans understand that voluntarily increasing dependence on Kremlin energies by Nord Stream 2 is not a rational thing, no matter how many former chancellors can Putin buy to work on his behalf? What else is sovereignty than citizens having the right to decide their leaders in fair elections free of hostile foreign interference, including hacks of candidates that Moscow doesn’t like?
Jakub Janda is Head of Kremlin Watch Program and Deputy Director at the European Values Think-Tank based in Prague. He specializes in response of democratic states to hostile disinformation and influence operations. In 2016, he was tasked by Czech security and intelligence institutions to consult on “Influence of Foreign Powers” chapter within Audit of National Security conducted by the Czech government. Follow him on Twitter @_jakubjanda
The money used in the scheme belonged to Igor Putin (cousin of Vladimir PUTIN) and the ROTENBERG brothers who are old friends of PUTIN. Investigators speculated that MIRROR TRADES where a part of a much larger money laundering operation but to date no additional evidence has been made public. To outsiders MIRROR TRADES are nearly indistinguishable from ARBITRAGE. (14)
MIRROR TRADES were kept under the radar by trading “over the counter”, and through a remote booking feature that did not require direct participation of the London office. Records showing losses at the end of the trading day would mysteriously show zero losses at the beginning of the next day. This strongly indicates traders were JOURNALING assets (moving assets between accounts) in order to make up for losses in one account with gains from another. (14, 15)
RENTEC is currently under investigation by the IRS for using a similar financial engineering structure to MIRROR TRADES known as BASKET OPTIONS (an option containing many different securities). Congressional investigators have claimed BASKET OPTIONS were used to avoid taxes and limitations on leverage, but they could also be used to facilitate money laundering. On behalf of the MEDALLION fund, RENTEC purchased an option from DEUTSCHE BANK and then sold the option one year later and claimed the long-term tax rate (24%) applied. In reality RENTEC exercised full control of the contents of the option, and executed hundreds of millions of high frequency transactions a year, most lasting only milliseconds. (16, 17)
