Associated Press- Amaranth Advisors LLC, a hedge fund that suffered a spectacular collapse last fall and lost some $6 billion, has agreed to pay over $716,000 to settle charges of violatingsecurities rules, the Securities and Exchange Commission said Wednesday.
Amaranth “willfully” violated the rules by improperly covering its short positions, or bets that prices will fall, in stocks of several companies involved in 2004 and 2005 offerings, the SEC said in an order laying out the terms of the settlement. Amaranth, which was based in Greenwich, Conn., also was censured under the agreement, in which it neither admitted nor denied the allegations.
Amaranth is paying a $150,000 civil fine and $566,819 in restitution and interest.
Nick Maounis, the hedge fund’s founder and chief executive, noted in a letter to investors Wednesday that the SEC settlement was unrelated to Amaranth’s failed natural gas investment that precipitated its collapse in September. Fund investors will not bear any of the cost of Amaranth’s payments under the accord, Maounis said.
“We remind investors that this is the first disciplinary action of any kind taken by any regulator against Amaranth or any of its affiliates,” he wrote in the letter.
