A federal appeals court in Washington this afternoon declined to review a dispute between two federal agencies sparring over the authority to pursue actions against the commodity futures trader who was at the center of the collapse of the hedge fund Amaranth in 2006.
The trader, Brian Hunter, who amassed losses of more than $6 billion in the natural gas futures market, is the subject of actions the Federal Energy Regulatory Commission and the U.S. Commodity Futures Trading Commission brought in 2007.
The CFTC’s suit against Hunter in New York is pending. The federal energy commission’s administrative proceeding is also ongoing. For background, click here.
FERC’s action alleges Hunter’s trading directly and indirectly affected the price of natural gas wholesale contracts. Hunter’s lawyers at Kobre & Kim, including name partner Michael Kim, allege FERC’s action is unlawful since Hunter had no business in contracts involving physical gas.
In the U.S. Court of Appeals for the D.C. Circuit, Hunter’s lawyers were fighting to get FERC’s action thrown out. Lawyers for the CFTC intervened in support of Hunter, saying that FERC’s administrative proceeding was outside of the commission’s authority. An administrative law judge has recommended that the federal energy commission find Hunter liable on all charges brought against him.
A three-judge D.C. Circuit panel—Chief Judge David Sentelle, Judge Karen LeCraft Henderson and Senior Judge A. Raymond Randolph—today declined to resolve the territorial battle. The court said that there has been no final action at the federal energy commission.
“The full Commission has made no ruling on the matter before us, except to hold that it has jurisdiction,” the panel judges said in a two-page per curiam judgment [.pdf] dismissing Hunter’s petition to review FERC’s contention that it has jurisdiction in the dispute.
Comments