Amaranth sues JP Morgan

Amaranth, a Collapsed Hedge Fund, Sues JPMorgan Chase
By REUTERS

Amaranth, the hedge fund that collapsed last year amid $6 billion in losses, has sued JPMorgan Chase for at least $1 billion, accusing the bank of fraudulently taking advantage of the firm during its crisis in September 2006.

Amaranth, which once had assets of $9.2 billion, charged in the suit, filed Tuesday in State Supreme Court in Manhattan, that bank executives spread lies about the value of its energy-trading assets in a successful effort to buy them cheaply.

“Absent JPMorgan’s actions, the fund’s losses, though significant, would have been survivable and far less dramatic,” a letter to investors signed by Amaranth’s founder, Nicholas Maounis, said.

The bank called the suit “an effort to rewrite history, and to blame JPMorgan for losses that were the result of Amaranth’s disastrous trading.”

Amaranth, once a highflying hedge fund, imploded over bad trades in natural gas.
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This suit raises the question of whether or not more collapsed hedge funds will look to shift the blame to banks and other service providers. I have not had an opportunity to read the complaint yet, but when I get my hands on it – I will post more comments.

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About Amir

I hate doctors!
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