Amaranth Hit For Naked Shorts

May 9 2007 | 2:04pm ET

Just because you’re in the process of shutting down after losing $6.5 billion doesn’t mean the Feds will cut you a break when it comes to naked short-selling.

Amaranth Advisors has settled naked shorts charges with the Securities and Exchange Commission, agreeing to pay $716,819 without admitting or denying the charges. The SEC had accused the firm of selling short five names in advance of secondary offerings, and then covering the sales with securities bought in those offerings.

Amaranth, which is in the process of shutting itself down, assured its investors that the short sales had nothing to do with the firm’s historic losses, which resulted from bad natural gas trades.

“The trades that are the subject of the settlement represent a variety of trading errors or misunderstandings of the application of the rule,” founder Nick Maounis explained in an investor letter.

The firm agreed to pay a $150,000 civil penalty, $507,627 in disgorgement and $59,192 in prejudgment interest.


In Depth

Steinbrugge: Will Hedge Funds Help or Hurt During the Next Market Correction?

Sep 7 2016 | 11:55pm ET

Most investors have become accustomed to quick rebounds when markets correct, but...

Lifestyle

Quattrex Sports AG Debuts Soccer-Focused UCITS Fund

Sep 9 2016 | 9:54pm ET

Innovative alternative investment company Quattrex Sports has unveiled a new UCITS...

Guest Contributor

Malik: The Ever-Changing Middle Market and The Entering Class of 2016

Sep 2 2016 | 5:01pm ET

Deal sourcing and origination is only going to get more competitive given current...