A few years back, a hedge fund in Greenwich went out of business. Perhaps you’ve heard of it. Was called Amaranth Advisors. Was run by a guy named Nick Maounis. Had this lovable goof of a Canuck named Brian Hunter making natural-gas trades. Brian was always up for a good laugh and one day, on a lark, put on some trades that resulted in the firm losing, I don’t know, like $6.6 billion. It’s was hilarious! Maybe you had to be there, but I’m telling you, it was pant-pissingly funny. Definitely one of the best things to happen to the hedge fund community in a while.
Anyway, Maounis went on to start a new fund called Verition with most of the gang from the old shop, except for Hunter, who did some work for Peak Ridge Capital and also spent the last few years unsuccessfully fighting fighting what he believed was a bum rap re: market manipulation (on good, non-firm-destroying trades). Continue reading »
At least, that’s what one gathers from the defacing he did to Mr. Maounis’s e-card sent out to investors in the new, less Brian Hunter-y fund, Verition, pictured here.
And the response by the Amaranth investor who for some reason was on the distribution list. Continue reading »
A few years back, a hedge fund in Greenwich went out of business. Perhaps you’ve heard of it. Was called Amaranth Advisors. Was run by a guy named Nick Maounis. Had this lovable goof of a Canuck named Brian Hunter making natural-gas trades. Brian was always up for a good laugh and one day, on a lark, put on some trades that resulted in the firm losing, I don’t know, like $6.6 billion. It’s was hilarious! Maybe you had to be there, but I’m telling you, it was pant-pissingly funny. Definitely one of the best things to happen to the hedge fund community in a while.
Anyway, some people, namely Amaranth clients, who are humorless stiffs, didn’t find the blow up that funny. So even though Maounis who, FYI, has yet to get investors their money, was chomping at the bit to get things going again he had to lay low for a while. He and other members of Team A dispersed and went pretty much radio silent. Maounis told everyone not to contact him, and to instead wait for his signal. And now, the time has come. Continue reading »
How many Houston-based billionaires did Brian Hunter try to screw in an attempt to not blow $6 billion out of his ass, have himself escorted from the Amaranth building and be placed on Nick Maounis’s permanent shit list? At least one that we know of but maybe more will come out of the woodwork. For now it’s John Arnold. The Centaurus founder could probably point to trades that made him a ton of money but you really can’t put a price on avoiding the humiliation that would’ve come from being taken for a ride by fish boy.
Traders familiar with Arnold’s style also credit a calm and disciplined manner that helps him stay eerily focused on the fundamentals of the market when other trades are creating distractions.
That was on display most notably during the Amaranth debacle. Amaranth, a $9 billion commodities hedge fund in Greenwich, Conn., was betting that natural-gas prices would rise in the winter, according to a Senate report that shed light on what happened in September 2006.
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Paul Touradji knows his way around a courtroom. He also knows how to write a strongly-worded countersuit. So if you’re planning to tussle with him, you’d better have your ducks in a row.
Nick Maounis failed to heed this advice in September, but he’s (wisely) had a change of heart, with a little help from Touradji. The Amaranth Advisors founder had his corpse of a hedge fund sue Touradji Capital Management for breach of contract and insider-trading, pointing the finger squarely at its namesake.
Well, Paul Touradji has set Nick straight, and the latter offers up a sufficiently meek “explanation” for why he backed down in a joint statement.
…since filing the summons and notice, and consistent with their role as fiduciaries, the Amaranth parties have continued their investigation of the claims and of the transaction. Since then, Amaranth has received and evaluated additional information regarding the transaction, including trading records and other information voluntarily provided by Touradji Capital, that is consistent with Touradji Capital’s position that it did not violate the agreement with Amaranth and did not misuse Amaranth’s proprietary information.
Well, we have it on good authority that the “information” voluntarily provided by Touradji included a draft countersuit. Selections follow.
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Say what you will about Marc Dreier, yes, ok, so he was into that whole “Yale thing,” but he sure know how to pick victims. The list of his stingees has grown to include Amaranth Group Inc., Perella Weinberg Partners and Blackstone Group LP’s GSO Capital Partners. Given the current environment, prosecutors are going to have to prepare themselves to defeat the dreaded Robin Hood defense.
Government lawyers identified the firms in a court filing in New York on Feb. 9 as three of the 20 institutions they claim are victims of Dreier’s thefts. Prosecutors didn’t disclose how much it alleges each of the companies lost.
Is it possible that all these losses never came to light before because these big name hedge funds failed to report the crimes? It seems awfully unusual that Dreier could have defrauded all these funds without tipping a few of them off before now. (Amaranth? That was so 2006).
Amaranth, Perella Were Victims of Dreier’s Fraud, U.S. Says [Bloomberg]
Remember the good old days? You know, when hedge-funds were still an asset class? When they roamed the earth, masters of all they surveyed? Back when men were men and administrative assistants were scared? Back when a multi-billion dolalr hedge fund blow-up could be so shockingly boring that a mere two years later you barely remembered its name? When even the largest blow-up to that point hadn’t caused enough of a problem that talking heads had to repeatedly explain what a “counterparty” is. They see a distant memory, I know, but they happened. I have evidence. Like this articule in the New York Times on Amaranth and its counterparties.
Amaranth Advisors, the $9.2 billion hedge fund that collapsed in 2006, has moved closer to having its day in court with JPMorgan Chase.
Though a judge has granted JPMorgan’s motion to dismiss five of Amaranth’s legal claims against it, he ruled that one of Amaranth’s claims — that JPMorgan breached its client agreement in its role as Amaranth’s prime broker — can proceed, according to a decision filed electronically with the New York Supreme Court on Monday.
Amaranth and its founder, Nick Maounis, have alleged in court documents that JPMorgan unfairly used its power as the hedge fund’s prime broker to profit from bad bets Amaranth made on the natural-gas market.
Kids today, I tell you. No respect for anything. It’s getting so you can’t even take undue advantage of your prime brokerage agreement.
Amaranth Claim Against JPMorgan to Proceed [The New York Times]
