Friday, 25 July 2014
Last updated 8 hours ago
Mar 18 2013 | 2:04pm ET
The man whose trades doomed Amaranth Advisors has put a serious crimp into the Federal Energy Regulatory Commission's authority.
A federal appeals court in Washington last week threw out FERC's $30 million fine against Brian Hunter for alleged market manipulation. The court agreed with the Commodity Futures Trading Commission that it alone has authority over futures contracts.
"Manipulation of natural gas futures contracts falls within the CFTC's exclusive jurisdiction," the court ruled.
FERC levied the fine against Hunter two years ago—the largest in the history of the regulator—accusing him of seeking to depress prices. The CFTC put its own case against Hunter on hold last year after Hunter sued FERC.
"FERC unjustly vilified Mr. Hunter for years, but it was in fact the FERC which had acted outside of the law," Hunter's lawyer, Michael Kim, said.
Hunter's natural-gas trades cost Amaranth $6.6 billion in September 2006, leading to the hedge fund's implosion.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…