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

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...