According to a scoop in the NY Post, the CFTC is looking to get a peek under the hood of Renaissance Technologies in order to see if the trading algorithms that power its dominance are totally kosher.
Federal regulators are probing the secret trading code at Renaissance Technologies, the massive quantitative hedge fund run by James Simons and Robert Mercer, The Post has learned.
The Commodity Futures Trading Commission has recently asked to dig into the trading software at the $65 billion hedge fund, James Rowan, the fund’s chief operating officer, told an audience of hedge fund managers on Tuesday in New York, according to two people who were in the audience.
A federal regulator taking interest in a $65 billion quant fund that is shrouded in secrecy and seemingly incapable of losing money is not a shock, in fact it feels almost overdue, but the CFTC taking this action at this moment in time presents us with one enormous question: What the fuck is Bob Mercer even paying for?
After being the bankroll-cum-galvanizing ideological force behind the Trump campaign, Mercer has watched his returns come in as the new administration declared war on political norms, regulation, and the notional idea of government. One of the starkest examples of the Trump White House letting the US Government atrophy is ironically the CFTC. After the resignation of commissioner Sharon Bowen yesterday, the five member committee currently has one member.
But apparently that slow march towards irrelevance is not enough to stop the CFTC from trying to get a look at RenTec's famously secret sauce. And while Jim Simons is probably greeting the news with a fresh ciggie and a charming shrug, we have to assume that Bob Mercer is pretty fucking pissed. In fact that sound you hear is likely all of Steve Bannon's phones ringing at once...even the one he hides inside that bottle of cheap scotch under his desk.
We're going to go out on a limb and guess that this whole probe disappears in the very near future.
UPDATE: According to the CFTC, this thing has already disappeared inasmuch as it never was. “The CFTC has not made any inquiries or requests related to the source code of Renaissance Technologies," an agency spokeswoman told Dealbreaker. James Rowan has also told The Post that he was misquoted.