Brian Hunter vs. US Energy regulators

As Bloomberg put it:

Brian Hunter, the former energy trader whose bad bets helped bring down Amaranth Advisors LLC, sued the Federal Energy Regulatory Commission, saying the agency lacks authority to enforce rules in futures markets.
In a lawsuit filed yesterday (Monday) in a federal court in Washington, Hunter said the Commodities Futures Trading Commission, not FERC, has exclusive authority to regulate futures markets for energy commodities.
FERC, which regulates the sale and shipment of natural gas in the U.S., sent a letter to Hunter July 20, telling him that the regulator intends to file an enforcement action against him, according to the complaint.
“FERC’s assertion of jurisdiction to bring an enforcement action is an impermissible encroachment on the exclusive statutory jurisdiction of the CFTC,” Hunter said in the suit.

So he’s saying CFTC should be getting on his case, not FERC. Well, this morning the CFTC obliged:

Washington D.C. – The U.S. Commodity Futures Trading Commission (CFTC) announced today the filing of a civil enforcement action in the United States District Court for the Southern District of New York against Amaranth Advisors, L.L.C., Amaranth Advisors (Calgary) ULC (collectively “Amaranth”), and Brian Hunter, alleging that defendants engaged in a scheme of price manipulation that violated the Commodity Exchange Act, as amended (the Act). Specifically, the Complaint alleges that the defendants intentionally and unlawfully attempted to manipulate the price of natural gas futures contracts on the NYMEX on February 24 and April 26, 2006. The CFTC is seeking permanent injunctive relief, an award of civil penalties, and other remedial and ancillary relief as is necessary.


The Complaint also alleges that, in violation of the Act, and in response to an inquiry from NYMEX about the April 26, 2006 trading, Amaranth Advisors L.L.C. made false statements to NYMEX to cover up defendants’ attempted manipulation. For more detail on the allegations, please see the attached excerpts from the Amaranth Complaint.

The CFTC release is here, with a link to the actual complaint here. A summary of sorts is here.