Monday, December 18, 2006

Consequences of Amaranth Failure

If you work for some company and if you screw up billions of dollars, you may not find another job for the rest of your career. True or False?

In Wall street, it's false. You can screw up billions of dollars, but still you can get away with it.

Brian Hunter, the natural-gas trader behind massive losses at hedge fund Amaranth Advisors, is exploring whether to get back in the game, people familiar with his plans say.

He approached Wall Street contacts to gauge investor interest in backing him, these people say, and may decide whether to resume energy trading in a few months. His decision on whether to start a new energy fund could depend on the outcome of regulatory inquiries and litigation over Amaranth's collapse.

Amaranth, based in Greenwich, Conn., is liquidating, after Mr. Hunter's bad bets triggered roughly $6.4 billion in losses, or 70% of its assets.

An executive recruiter in contact with Brian Hunter says he has offered to help introduce the once-highflying trader to investors. The recruiter sees opportunities for Hunter to make a fresh start with high-net-worth investors, possibly in Russia and the Middle East.

Hunter was estimated to have made at least $75 million in 2005. He has kept a low profile since the blowup, while moving to a new house in a wooded area near his native Calgary, Alberta. A friend says he plans to take an island vacation soon and isn't rushing to make a move.

Betting on fallen hedge-fund stars isn't all that uncommon. John Meriwether, who led Long-Term Capital Management until its 1998 implosion, now runs another hedge fund.

Meanwhile, the fools that lost money in these hedge funds, live in Mental asylum.

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