Amaranth says suing fund 'knew the risks' |
Date: Saturday, June 9, 2007
Author: Paula Schaap, Financial News
Collapsed hedge fund Amaranth
Advisors is trying to get a
Amaranth imploded last fall after losing about $6.6bn (€4.9bn) when its bets
on natural gas price movements went awry. The hedge fund asked a federal
district court on Thursday to dismiss the suit lodged against it by the San
Diego County Employees Retirement Association.
The suit claims that Amaranth’s investments in natural gas futures were
contrary to its representations that it would invest pension fund money in a
diversified portfolio.
In the court papers, Amaranth claimed that San Diego “knew exactly what they
were getting into” when the pension fund's chief executive officer, Brian
White, agreed to invest about $150m in the hedge fund.
Amaranth said that the pension fund was amply warned that investing in the
volatile energy sector was Amaranth's core strategy and investors were told
that the hedge fund might concentrate most of its investments in one sector.
Amaranth also said that
Dan Webb, of Winston & Strawn, counsel to Amaranth said: “Recently a
Grand Jury investigating San Diego County Employees Retirement Association
found that Amaranth's fund documents clearly ‘highlighted the risks involved in
energy trading' along with 'a wide variety of risks that could cause the investor
to lose all or part of his money.’”
A spokesman for
“When you look at the whole set of the documents and their representations,
we believe that they haven’t been honest in what they told us what they would
do," the spokesman
In March, the