Dealbreaker

Former Amaranth energy trader and current fishing enthusiast Brian Hunter, whose natural gas picks turned out to be so wrong that they lost the hedge fund $6 billion in week, filed an 18-page plea with a federal court in Washington, D.C. on Friday, asking them to stop FERC from looking into his job history. Why? It’s causing all sorts of problems for him at his new place of employment, and not just catty inter-office talk, like “B-bone’s ass looks huge in those pants.” (That was just a for instance. “That picture with the fish was totally staged. Dude’s never caught a guppy in his life” would work, too). According to Hunter, as a direct result of FERC’s investigation into his alleged market manipulation, Solengo has lost fund directors, traders and potential investors.

“The FERC’s OSC has continued to damage Solengo Capital Advisors and the company is now on the brink of complete disintegration,” Hunter noted in a supplemental declaration, and you know he must mean it because this guy never lies. Among the supposed ways Solengo has been victimized by FERC are the fact that two directors of the Solengo Managed Funds resigned on July 25, two portfolio managers who’d previously given their word to join the firm reneged, and the fund has lost an enormous amount of (potential investor) money, though not as much as Brian misplaced at Amaranth (come on now). The filing states that prior to FERC’s (just plain rude) action, 25 investors had plans to fork over $800 million in ‘lengo. The fine wine now counts less than 12 entities with a total of $100 million among them willing to give the fund any money. And—get this—there’ve been no new inquiries since FERC started sticking its nose in other people’s business.

Hunter also jumps in his Delorean and comes back to report in the filing that he may have to walk away from the operation entirely, since Solengo will probably not win the approval of Alberta regulators while his name remains on the box. (Unsolicited: maybe that’s what you should’ve done in the first place? Taken the hundreds of millions that remained in your bank account even after you guessed everything wrong at Amaranth, sat on a beach in the Virgin Islands (or down the shore, whatever) and promised to never trade again, even through E*TRADE Financial? OR, alternatively, used these psychic powers to not blow up your former employer?).

If salty discharge hasn’t appeared around your eyes yet, wait. By Hunter’s estimation, he has invested $1.7 million of his own money and an “enormous amount of [his] time” setting up the fund that may soon just be a distant memory (remembered for getting miffed at us for showing its marketing brochures, which have since been replaced with pictures of puppies in the sun). Anyone need a minute? There's no judgement in this room.

Perhaps to humanize the piece a bit, Hunter writes that there are 11 members of the Solengo family—“three portfolio managers, a head of systems engineering, a director of operations, a director of tax and accounting, a quantitative analyst, a director of marketing and an individual in charge of information technology”—and provides the educational and professional backgrounds of the ones thought to elicit the most sympathy. (2 Points for use of the word "family," as regulators are suckers for that kind of stuff, -5 points for not having the guts to say that FERC's going to make "orphans" out of them. That would've been a touché moment, my friend).

“If the team—which has spent the past several months working together on various investment research and other business projects—were to disperse, it would be virtually impossible to reassemble them,” Hunter wrote.

What’s more, we’re given a glimpse into the 2,500 square foot office space located in downtown Calgary. For 13,255 Canadian dollars a month, you get “a traditional trading floor, a conference room, four--four-- couches, four TVs, a Bloomberg terminal and “a fully functional kitchen.” Not a kichenette, not a hot plate-cum-microwave, but a "fully functioning kitchen." The ability to eat breakfast at one's desk, or even bring a bagged lunch without having to worry about it being refrigerated is being put in jeopardy, for these 11 people. Because of FERC.

Yes, Brian, up until now, everything was going swimmingly for Huntengo. Until this. Yes, yes, THIS is the thing that will ruin Huntego’s reputation. Not that bit of bad luck at Amaranth, not the less-than-stellar reference from Nick Maounis, or that TAKE NO PRISONERS lawsuit launched against a blog, no, no, it’s THIS. Do you hear yourself talk? Carney might kill you tonight.

Earlier: Brian Hunter Will Not Have His Integrity Impugned

Hunter Affidavit
Shondall Affidavit