Brian Hunter Fined $30 Million For His Nat Gas Manipulation Scheme

It isn't a Wall Street CEO. But it is a start. One of the most well known market manipulation crimes of the pre-Great Financial Crisis era, has just been fined $30 million. Yes, it is far less than what Hunter has made during his career, but it is not just a wristslap either. And at least it has finally happened: after 5 years many had assumed that regulators would totally screw this up as well. From DealBook: "Energy regulators on Thursday fined a former hedge fund trader $30 million for his role in a scheme that manipulated prices in the natural gas futures market. Mr. Hunter and Matthew Donohoe, a fellow Amaranth trader, sold huge sums of natural gas futures contracts in early 2006 to drive down the settlement price of the trades, according to the Federal Energy Regulatory Commission. Mr. Hunter placed the trades during a so-called settlement period, the last 30 minutes of trading on the day that a futures contract expires." Now... For that precious metals market manipulation that only fringe lunatic website allege is happening...

More from Dealbook:

Amaranth stood to gain as the settlement price dropped, the commission said. Using separate derivative positions, the fund bet on a decline in the settlement prices.

The trades were “fraudulent or deceptive” and violated the commission’s antimanipulation rule, according to an order against Mr. Hunter.

Ultimately, Mr. Hunter’s energy trading desk caused the demise of Amaranth. The fund’s energy traders placed big bets on natural gas in 2006, only to see prices plummet in the fall of that year.


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