Hedge Fund, Banks Take Heat At Senate Hearing on Tax Avoidance

Representatives of Renaissance Technologies LLC and two banks struggled at a congressional hearing to describe their relationship over so-called basket options that are the subject of a federal tax avoidance inquiry.

At a July 22 hearing of the Senate Permanent Subcommittee on Investigations, executives from Barclays Bank PLC and Deutsche Bank AG resisted assertions by panel Chairman Carl Levin (D-Mich.) that Renaissance—a hedge fund that bought basket options from the banks—solely owned and controlled the accounts.

Control of the basket options is a key point of the subcommittee’s and the Internal Revenue Service’s inquiries into Renaissance, which was able to ...