Amaranth’s Future Remains Uncertain After $6 Billion Loss

Sep 30 2006 | 8:59am ET

Amaranth Advisors’ survival is anything but certain, in spite of claims last week by founder Nicholas Maounis that the fund had “every intention” of staying in business.

The Greenwich, Conn.-based hedge fund firm lost $6 billion (out of $9.5 billion in assets) on natural gas bets this month, may be less sanguine about its hopes this week, as redemption demands pour in and the Securities and Exchange Commission launches an investigation into the mess.

Two investors who met with Maounis told Bloomberg News that he said Amaranth needs to find a buyer, for all or part of the firm, to stay above water. Citigroup is reportedly interested, and its hedge fund chief, Dean Barr, spent a lot of time in Greenwich last week in discussion, but there is no indication when or if a deal will be struck.

Possibly worse still, SEC Commissioner Paul Atkins said the regulator is investigating “whether there was any misrepresentation to investors.” Amaranth has retained law firm Skadden Arps Slate Meagher & Flom to help it put
into place a system for redemptions and prepare for any possible lawsuits.

Meanwhile, the New York Mercantile Exchange said it warned Amaranth in August that its natural gas trades were too big, and that the firm cut some of the trades in response. And the man behind those disastrous trades, Brian Hunter, has left Amaranth. The firm wouldn’t say whether he had resigned or been terminated, but it did say he didn’t receive any termination pay.


In Depth

Q&A: SkyBridge’s Anthony Scaramucci Readies For Wall Street Week Debut

Apr 16 2015 | 12:56pm ET

Anthony Scaramucci, founder and managing director of asset management firm SkyBridge...

Lifestyle

Puerto Rico Woos The Rich But So Far Gains Little

Apr 17 2015 | 2:45am ET

Hedge fund manager Rob Rill grins. He has just had word that U.S. financial regulators...

Guest Contributor

Minnesota Supreme Court Rejects The Ponzi Scheme Presumption: Lenders Claw Back Some Of Their Own Rights

Apr 17 2015 | 9:23am ET

A recent court ruling in Minnesota has put an end to the Ponzi Scheme Presumption...

 

Editor's Note