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

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Future of Private Equity: New Opportunities, New Challenges

Feb 3 2017 | 6:41pm ET

The private equity industry’s astonishing rebound since the financial crisis has...

 

From the current issue of