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Amaranth to San Diego Pension Fund: You Gotta Take the Good With The Bad

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Amaranth Advisors responded today to the lawsuit filed by San Diego County’s pension fund, which suffered large losses when the hedge fund collapsed. The response reminds us of the old story about the woman who nurses an injured snake back to health only to get bitten by the snake. As she dies from the venom, she asks the snake why he would bit her. The snake responds, “Look, bitch, you knew I was a snake when you picked me up.”
Lawyers sometimes use the story to illustrate the concept of assumed risk. Amaranth attorneys didn’t go that far but the message of their court filing seeking to dismiss the lawsuit was essentially the same: the professionals at the pension fund “knew exactly what they were getting into” when they invested 2% of their capital in Amaranth.
The hedge fund’s lawyers ask the court to dismiss the lawsuit on the grounds that “investors who knowingly make risky investments to take the bad with the good.”
Amaranth's Motion for Dismissal [pdf from]
Amaranth’s Dynamic Duo: Dan Webb & David Boies [Law Blog]