Carl Levin

Was there a question in these conversations with your tax people, that there was a concern that the old MAPS, the old approach, might not be respected as a derivative or it might not be respected as an option for tax purposes?

So take a look, if you would now, at Exhibit 42.

COLT provides an after-tax benefit to these investors through the conversion of their return from the fund from short-term capital gains (taxed at 39.6%) to long-term capital gains (taxed at 20%).

This gives rise to significant short-term capital gains for the investors regardless of whether or not they are invested in the fund for the shorter or longer term.

If they were not within those guidelines when they made those decisions, using your platform, that was not a recommendation to you.

I am just asking you, did they have full discretion or not within the agreement that you reached?

Other than they had to operate within the guidelines, they could buy and sell anything they wanted, right?

Now, to both of you, Renaissance is using the bank's trading execution system to place and execute by itself, several hundred thousands trades a day that go into the basket account.

For 10 years, tens of millions of buys, you did not lose a penny on any of the buys.

Now, when Renaissance sends a marketable order using your software system to the stock market, 30 million--or, I guess--yes, 30 million a year between the two banks.

Year after year you are representing to the regulator these entities are not controlled by Barclays.

That is a very direct question.

Mr. Mayers, a critical event regarding the question of who controlled the bank accounts occurred in 2009...

It means what it says. You signed the agreement, didn't you?

How is it under any definition conceivable that the Buyer, Franconia, with no employees, will not contact directly the Investment Advisor?

Now, I want to explore some of the fictions that I have referred to in some detail...

So this is a second reason why they would have a problem with--from a tax perspective--from what the claim of the long-term gain is.

In recent years, this Subcommittee has devoted significant time and effort to exposing complex financial arrangements that profitable corporations and wealthy individuals employ to avoid their obligations to pay all their U.S. taxes.

I think we may hear that argument this morning.

I would say yes, although there is the word 'either' here, and I do not quite understand this formulation.

How many times did that happen?

We also have examined reckless behavior that has put the stability of the financial system--and by extension, the U.S. economy--at risk.

So of the 15 million trades at your bank, the guidelines did not stop any of those trades.

How about Deutsche Bank?

Did the banks, either of your banks, from these tens of millions of trades that were executed every year in your accounts for the option basket and from the billions of dollars of profits earned in those accounts, did your banks receive…