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The New York State Department of Labor Would Like A Word With Jim Simons

A refrain typically heard when discussing Jim Simons’ Renaissance Technologies is that it “must” be a Ponzi scheme. Those shouting ‘Ponz’ simply can’t wrap their minds about the eye-popping returns in the Medallion fund-made up mostly of employee money- and the comparatively less stellar performance of RIEF and RIFF. They’re also made nervous by the huge computers housed on RenTec’s campus-esque grounds; throw in a socially awkward CEO who professes to hate human interaction and a couple of unicycles and Ponzi is the only way they can square things away. These people are, of course, imbeciles and the statement “Jim Simons hates the feeling of nicotine in his lungs” would hold more weight. No, the quants at Renaissance are far too intelligent to run some amateur hour scam any hack broker could pull off. They make honestly, through complex algorithms and loopholes in labor laws.

Renaissance Technologies, the $15 billion hedge fund started in 1982 by Simons, 72, was found by the state Labor Department in 2009 to have been mischaracterizing security guards for years, documents show. The case of Simons, a math whiz, versus the state unemployment benefit fund came to light after one guard, Louis Marsicovetere, an ex-NYPD officer, left his job at RenTech’s Third Avenue office in 2008 and filed for unemployment insurance. It was then that Marsicovetere learned RenTech had been classifying him as an independent contractor, not as an employee, state documents show, and that in consequence the company had not made unemployment payments on his behalf and that he was, at first, ineligible for jobless benefits. The move meant the company paid less unemployment insurance and other labor cost payments than it would have if the guards were tabbed as employees. Employment-law experts, noting the number of guards and how much they made, estimated the back taxes, including penalties, might cost RenTech up to $100,000.

After some back and forth, state labor officials ruled in favor of Marsicovetere in April 2009, telling RenTech to amend its quarterly reports on the former guard and “all other persons similarly employed” since 2006, when Marsicovetere first started working there. Documents show the case rests on such minutiae as which party set Marsicovetere’s hours and pay, and whether the outfit he wore to work can be considered a uniform. The former guard claims he was an employee and the uniform each guard wore included a tie with the RenTech logo.

If the Department of Labor thought Jim was just gonna roll over and take it, however, they had another thing coming. Simons appealed the ruling and a hearing is scheduled for today before the state Unemployment Insurance Appeal Board to determine if a precedent will be set vis-a-vis how other hedge funds will make an extra buck in the future, should things tip in Jimbo’s favor.

[NYP]

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41 Responses to “The New York State Department of Labor Would Like A Word With Jim Simons”

  1. Guest says:

    Hey Cancer Man, in case you didn’t take the hint, I want a slice

    -Cuomo

  2. Lkj says:

    All this over 100K?

  3. CoveredLong says:

    Did you hear the one about the time Simons almost ran out of cigarettes – yea, luckily he got a new pack, just in the nic-o-time.

    -Guy who gave up on funny comments because of a bum knee

  4. Guest says:

    With so many nerds/geeks cannot they just hack the NYS system? Bet even my grandma can do it.

  5. Ronnie the Limo Driver says:

    Hey Louis, can I get your attorney’s number?

  6. Anonymous says:

    I smoke Cubans.

    -JC Davies

  7. Anonymous says:

    I smoke Cubans.

    -JC Davies

  8. Guest says:

    You can quit your job and still collect unemployment in NY?

    • StrangeBrew says:

      Even better….apparently you can collect unemployment at the same time you collect a NYPD pension.

      • guest says:

        And the fact that every year by Feb. 1, he receives an IRS Form 1099 and not W-2–you would think this would have been a clue to the ex-NYPD officer, his tax preparer, or even Turbo Tax that he was classified as an independent contractor not an employee

        • W-2 vs 1099 says:

          There was no surprise here. Everyone knew the score. This employment ended badly, for whatever reason, and this is his attempt to blackmail some sort of settlement.

          Just because you get a 1099 doesn’t mean that the state and fed won’t consider you an employee. There are a number of indicia that can lead them to the conclusion that you are, in fact, an employee and that you were only classified as a contractor so your employer could avoid paying taxes.

          The uniform mentioned is one such indicator. There are many others, like the title on your business card (probably not applicable here), whether you are free to have a 2nd job, whether this is your only job, how much control your employer has over your schedule, vacation, etc.

          Going back to all “contractors” employed since 2006 and collecting back pay, along with fines and penalties, could be big. It could be bigger if/when the feds do the Fed withholding / medicare / Social Security withholding analysis. They don’t take kindly to misclassifying employees as contractors.

          • guest says:

            My previous point was that until he tried to collect unemployment, he enjoyed the benefits of being classified as an independent contractor–whatever those may have been.

            But yes, agree–this was some sort of revenge move on the part of the ex-NYPD officer

    • StrangeBrew says:

      Even better….apparently you can collect unemployment at the same time you collect a NYPD pension.

  9. A tie with the logo of the firm you work inside of? Don’t be that guy…

  10. HFguy says:

    I am not surprised.. for long investors have wondered why medalion performs better than jim’s other funds.. i had the view he fucking front runs his own funds to make medalion return better than other .. no wonder no investor is allowed into the elusive medalion.

  11. You_guest_it says:

    So you don’t need human intelligence to collect unemployment? I’m feeling more secure about my post-employment prospects.

    -STAR
    Rebellion Research

  12. You_guest_it says:

    So you don’t need human intelligence to collect unemployment? I’m feeling more secure about my post-employment prospects.

    -STAR
    Rebellion Research

  13. Nouveau Richie says:

    I see JS is an avid Mad Men fan-boy.

    -Guy who thinks people didn’t smoke cigarettes indoors or wear business formal to work before the creation of the hit AMC drama “Mad Men” starring Jon Hamm as the enigmatic Don Draper

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