Ex-Amaranth trader fined $30M for gaming the gas market

Ex-Amaranth trader fined $30M for gaming the gas market
The Federal Energy Regulatory Commission issued a $30 million fine against former Amaranth Advisors LLC energy trader Brian Hunter, who is accused of manipulating the natural-gas futures market in 2006.
APR 17, 2011
The Federal Energy Regulatory Commission issued a $30 million civil penalty against former Amaranth Advisors LLC energy trader Brian Hunter, who is accused of manipulating the natural-gas futures market in 2006. The fine “is a sufficient deterrent” to discourage traders from engaging in market manipulation, FERC Chairman Jon Wellinghoff told reporters today at the agency’s monthly meeting. Hunter has 30 days to pay or appeal, FERC said. The agency alleged Hunter manipulated the price of contracts on the New York Mercantile Exchange in 2006 while boosting the value of financial derivatives. Amaranth lost $6.6 billion betting on the price of natural gas. The Greenwich, Conn.-based hedge fund that once controlled half of the natural-gas market, collapsed in 2006. In August 2009, the company agreed to pay $7.5 million to end U.S. cases brought by FERC and the Commodity Futures Trading Commission for trying to manipulate natural-gas prices. FERC had initially proposed a $291 million fine against Amaranth, Hunter and another trader, Matthew Donohoe, who settled with the agency. A FERC judge ruled in January 2010 that Hunter had manipulated gas markets. “The FERC has no jurisdiction according to Congress and the CFTC; therefore this means nothing,” Michael Kim, an attorney at Kobre & Kim LLP in New York who represents Hunter, said in a e-mailed statement today. Hunter can ask the agency to re-hear his case and, if denied, appeal to the U.S. Court of Appeals for the District of Columbia Circuit. The case was the first in which FERC went after a participant in the futures market for actions it said affected the price of delivered gas, which it oversees. “This is a seminal case in FERC law,” Susan Court, an attorney with Hogan Lovells US LLP and a former FERC enforcement director, said in a phone interview. --Bloomberg News--

Latest News

People moves: RBC taps Raymond James veteran for Texas complex
People moves: RBC taps Raymond James veteran for Texas complex

Meanwhile, DPL Financial Partners adds two annuity executives and Prime Capital Financial hires a Mid-Atlantic retirement plan consultant

Ex-LPL, special needs advisor pleads guilty in fraud case
Ex-LPL, special needs advisor pleads guilty in fraud case

Andrew Komarow pleaded guilty Thursday in federal court in Hartford to defrauding three financial services companies of close to $3.3 million.

Advisor moves: Raymond James lands $700M Truist team in Naples
Advisor moves: Raymond James lands $700M Truist team in Naples

Elsewhere, Cetera picks up a $210 million Connecticut team from MML, while Wells Fargo FiNet adds a San Diego family practice from LPL

Investor accuses Lasater Capital of hiding $100M in fund defaults
Investor accuses Lasater Capital of hiding $100M in fund defaults

Celebrity endorsements, $500M in claimed assets, and a state regulator stepping in.

American Express to make job cuts as AI revolution ramps up
American Express to make job cuts as AI revolution ramps up

“We needed to become a more agile and efficient organization,” said American Express CEO Stephen Squeri.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor