Amaranth Trader, CFTC Win Jurisdictional Fight With Energy Regulator

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.


In Depth

Q&A: Old Hill's Stone On Private Debt, P2P And Credit Bubbles

Jun 6 2017 | 7:52pm ET

While institutional capital continues to flow into the broader private debt sector...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Steinbrugge: Asia-Focused Hedge Funds Offer Great Opportunities

Jun 23 2017 | 3:33pm ET

Emerging market strategies have outperformed their developed-market peers for five...

 
Error

From the current issue of