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

Q&A: Reg A+ Will Transform the Alternative Asset Landscape

Jul 7 2015 | 4:03pm ET

In addition to easing capital formation for small companies, Regulation A+ has enormous...

Lifestyle

Fiat Chrysler Files Paperwork For Ferrari IPO

Jul 23 2015 | 5:05pm ET

Italian sportscar maker Ferrari has taken a step closer to a stock market listing...

Guest Contributor

Lifting of Foreign Ownership Limits Signals Sea Change in Vietnam's Capital Markets

Jul 28 2015 | 3:01pm ET

The lifting of restrictions on foreign ownership limits in Vietnam later this year...

 

Editor's Note