The U.S. Commodity Futures Trading Commission today filed civil charges against Amaranth Advisors LLC and its ex-head energy trader Brian Hunter.
The U.S. Commodity Futures Trading Commission today filed civil charges against Amaranth Advisors LLC and its ex-head energy trader Brian Hunter.
The regulatory organization alleged that both the collapsed New York-based hedge fund and Mr. Hunter manipulated natural gas futures prices on the New York Mercantile Exchange on Feb. 24 and April 26, 2006, violating the Commodity Exchange Act.
The CFTC filed its complaint with the District Court for the Southern District of New York.
The CFTC also said that the hedge fund gave false and misleading statements to NYMEX in order to cover up the scheme.
According to the CFTC’s complaint, both Mr. Hunter and Amaranth acquired more than 3,000 NYMEX natural gas futures contracts before the closing range on both Feb. 24 and April 26.
Amaranth and Mr. Hunter then sold the securities during the closing range, driving down the price of the futures on NYMEX to benefit their short natural gas positions on the IntercontinentalExchange.
Mr. Hunter is also facing heat from the Federal Energy Regulatory Commission.
The FERC informed Mr. Hunter on July 20 that it would bring an enforcement action against him for price manipulation.
However, the former trader is already trying to block the suit by saying that the FERC has no jurisdiction in the futures markets.