Brian Hunter faces charges of price manipulation in a civil enforcement action filed by the U.S. Commodity Futures Trading Commission (CFTC) in the United States District Court for the Southern District of New York. The CFTC alleges that Hunter, along with Amaranth Advisors L.L.C. and Amaranth Advisors (Calgary) ULC, engaged in a scheme to manipulate the price of natural gas futures contracts on the NYMEX on February 24 and April 26, 2006.
According to the complaint, the defendants acquired over 3,000 NYMEX natural gas futures contracts before the closing range on both expiry days – March 2006 and May 2006 – with the intention of selling them during that period. They also held significant short positions in financially-settled natural gas swaps on the IntercontinentalExchange (ICE). The CFTC alleges that the defendants aimed to depress NYMEX natural gas futures prices to benefit their larger swap positions.
The CFTC is seeking permanent injunctive relief, civil penalties, and other remedies. Amaranth Advisors L.L.C. is also accused of making false statements to the NYMEX in response to an inquiry regarding the April 26, 2006 trading activity, in an attempt to conceal their manipulative practices.
“This case demonstrates the Commission’s ongoing vigilance to punish those who attempt to compromise the integrity of the futures markets,” stated CFTC Acting Chairman Walter Lukken. Commissioner Michael Dunn added that the CFTC is prepared to enforce the Commodity Exchange Act and ensure fair and competitive futures markets.
The investigation received assistance from the Federal Energy Regulatory Commission (FERC), the Securities and Exchange Commission, and the New York Mercantile Exchange. Michael C. McLaughlin, Elizabeth C. Brennan, David Oakland, Linda Y. Peng, Karin N. Roth, W. Derek Shakabpa, and David W. Mac are listed as CFTC staff members responsible for the matter. The case was filed on July 25, 2007, in New York.
Source: CFTC.gov
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