FERC floats fines for Amaranth and traders

Amaranth Advisors LLC and a pair of its traders face $291 million in penalties for price manipulation, the Federal Energy Regulatory Commission said today.
JUL 26, 2007
By  Bloomberg
Amaranth Advisors LLC and a pair of its traders face $291 million in penalties for price manipulation, the Federal Energy Regulatory Commission said today. FERC issued a “show cause” order today, outlining its preliminary findings and proposing the fines. The regulatory commission is calling for hedge fund and trader Brian Hunter to pay a $30 million fine, and his colleague, Matthew Donohoe, to pay $2 million. FERC also proposed that Amaranth cough up $200 million in civil penalties and at least $59 million in unjust profits, plus interest. The three parties have until Aug. 27 to respond to the FERC’s show cause order. The failed Greenwich, Conn.-based hedge fund and the traders Brian have been accused of manipulating the settlement prices of natural gas futures contracts on Feb. 24, March 29 and April 26, according to FERC. The three drove down prices of natural gas futures on the New York Mercantile Exchange in order to gain on Amaranth’s short positions in the IntercontinentalExchange.

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