Brian Hunter, the natural gas trader whose large bets helped precipitate the $6bn collapse of Amaranth, the hedge fund, has agreed to pay $750,000 to settle attempted market manipulation charges.
Amaranth's spectacular failure in 2006 became a symbol of concerns over excessive speculation in commodities as the prices of materials from oil to wheat were racing to all-time highs.
A Senate committee report published in the aftermath determined that Amaranth at one time controlled 40 per cent of all outstanding winter gas contracts on the New York Mercantile Exchange.
More recently, the US Commodity Futures Trading Commission has invoked the Amaranth saga as it tries to impose new limits on the size of trader positions.
The CFTC sued Mr Hunter and Amaranth in 2007, claiming they had distorted wholesale gas prices on two occasions several months before losses sank the fund.
Amaranth paid a fine of $7.5m to settle manipulation charges in 2009, but Mr Hunter, its former star gas trader, fought on in court.
The $750,000 civil penalty agreed by Calgary-based Mr Hunter is a fraction of the $100m that Amaranth paid him in one year, according to an earlier CFTC court filing.
A separate $30m fine against Mr Hunter, imposed by the US Federal Energy Regulatory Commission, was rejected by a federal appeals court last year. The court determined his conduct fell under the CFTC's exclusive jurisdiction. The CFTC had intervened in the case to confirm its exclusive role.
Mr Hunter was accused of trying to manipulate prices on the last trading day of Nymex gas futures as they expired in February and March of 2006. Amaranth and Mr Hunter tried to push down gas prices on the Nymex to boost profits in much larger gas positions on the IntercontinentalExchange, which hosts a parallel gas contract, according to the original complaint.
As part of the settlement announced on Monday, Mr Hunter neither admitted nor denied the CFTC's original allegations. He will pay the cash penalty, and is permanently banned from trading during the settlement period on the last day of trading in all US commodity derivatives. The ban also covers trading gas futures just before the market closes.
© The Financial Times Limited 2014. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation