It’s reassuring to keep hearing calming noises from the SEC when it comes to Amaranth. Last week, SEC commissioner Paul Atkins was reported to have said that Amaranth’s meltdown was demonstrating that market risk controls were working and that no knew regulations were needed. Today, we learn that higher ups with the the SEC’s enforcement arm are not planning any action against Amaranth or its traders.
At Practising Law Institute’s Hedge Funds 2006: The Changing Regulatory Landscape Conference in New York, Gene Gohlke, associate director at the Office of Compliance, Inspections and Examinations, said Amaranth was a high-risk investment and billed itself as such. And the SEC had no plans of regulating risk, he said. As long as the investors knew what was going on, there was no legal issue for the firm.
SEC Plans No Action after Amaranth Meltdown [CCH Wall Street]