Amaranth Advisors

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Amaranth Advisors
legal form LLC
founding 2000
resolution 2007
Seat Greenwich , Connecticut , USA
Branch Asset management

Amaranth Advisors LLC was a US investment firm and multi-strategy hedge fund founded by Nicholas Maounis and headquartered in Greenwich , Connecticut . The company had up to $ 9 billion available for investment. It collapsed in September 2006 after losing more than $ 6 billion on natural gas futures . The loss of this company was one of the largest commercial losses ever known in economic history.

history

The company was founded in 2000 by Nicholas Maounis and has its headquarters in Greenwich, Connecticut. For most of their activities, arbitrage businesses have been the profit makers.

In 2004 and 2005, the company shifted its focus to energy trading , triggered by the Canadian Brian Hunter , who invested in the natural gas market. Hunter had made huge profits by betting "bullish" on the price of natural gas after Hurricane Katrina in 2005 . Hunter invested heavily in natural gas futures which built to a loss of $ 6.5 billion when prices did not go as expected and took an "ice cold dip". These events sparked debate and considerable public media attention on the issue of risk management practices to avoid catastrophic losses.

The fund had approximately $ 9 billion under management; Reports indicated that losses were 65 percent of their total investment. Amaranth transferred its energy portfolio to third parties, Citadel LLC and JPMorgan Chase . On September 29, 2006, the founder of Amaranth sent a letter to the members of the fund that he was ceasing business, and on October 1, 2006, Amaranth hired Fortress Investment Group to liquidate its assets.

On July 25, 2007, the Commodity Futures Trading Commission (CFTC) summoned Amaranth and Hunter to the New York Mercantile Exchange (NYMEX) for attempted market manipulation of the futures on natural gas prices and for providing false information . Additionally, the Federal Energy Regulatory Commission accused Amaranth, Hunter and trader Matthew Donohoe of market manipulation. The CFTC and FERC have had different, conflicting versions of what Hunter should have done and are currently arguing over jurisdiction over it.

On January 22, 2010, a Federal Energy Regulatory Commission judge ruled that Hunter had violated the anti-tampering rules of the commission. The judge Carmen Cintron found that "Hunter had deliberately manipulated the settlement price of the natural gas futures contracts in question". Its trading activity was specifically designed to lower the price of natural gas on NYMEX in order to "earn" from other trades' swap positions. This decision is pending revision by the Commission.

Amaranth filed a lawsuit against JP Morgan seeking compensation for $ 1 billion in losses on the grounds that the bank interfered with business operations to do better deals with Goldman Sachs and Citadel.

Web links

Individual evidence

  1. ^ Laurent L. Jacque: Global Derivative Debacles: From Theory to Malpractice . World Scientific, Singapore 2010, ISBN 978-981-283-770-7 , Chapter 5: Amaranth Advisors LLC , p. 49-72 (English).
  2. ↑ a b The man who lost $ 6 billion. cnn.com, July 8, 2008, accessed April 18, 2017 : “Brian Hunter brought down Amaranth with disastrous trades on gas. He is accused of manipulating the markets. He has been called the 'destroyer of all worlds.' But is he such a bad guy? "
  3. ^ Jenny Anderson: Betting on the Weather and Taking an Ice-Cold Bath . In: The New York Times . September 29, 2006 ( nytimes.com ).
  4. ↑ NDTV Interview on Amaranth Losses  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.@1@ 2Template: Dead Link / uk.video.yahoo.com  
  5. ↑ Shrugging off amaranth. cnn.com, October 16, 2006, accessed on April 18, 2017 (English): "Despite the meltdown of a major hedge fund, it's business as usual - and that could set the market up for a bigger blowup, says Fortune's Andy Serwer . "
  6. ↑ Amaranth says to transfer energy portfolio. (No longer available online.) Reuters, September 20, 2006, archived from the original on May 28, 2007 ; Retrieved April 18, 2017 (American English). Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / today.reuters.com
  7. ↑ ( Page no longer available , search in web archives: US Commodity Futures Trading Commission Charges Hedge Fund Amaranth and its Former Head Energy Trader, Brian Hunter, with Attempted Manipulation of the Price of Natural Gas Futures )@1@ 2Template: Dead Link / www.cftc.gov
  8. ^ Commission Takes Preliminary Action in Two Major Market Manipulation Cases (Federal Energy Regulatory Commission) ( Memento of September 10, 2008 in the Internet Archive )
  9. ↑ ( Page no longer available , search in web archives: FERC Rules that Amaranth's Brian Hunter Practiced Manipulation. )@1@ 2Template: Dead Link / www.opalesque.com
  10. ↑ ( page no longer available , search in web archives: Amaranth Sues JPMorgan for Disrupting Transactions (Update2): Bloomberg )@1@ 2Template: Dead Link / www.bloomberg.com