The collapse of the hedge fund Amaranth Advisors in September of 2006 drew a flurry of attention. There are several reasons why this hedge fund failure attracted such widespread media attention. First, the size and speed at which Amaranth made losses. In less than 14 days, from September 7, 2006 to September 21, 2006, they had lost almost $4 billion. Second,their losses occurred in the natural gas markets. There is some evidence that Amaranth’s trading activities in the natural gas markets distorted market prices and ultimately hurt consumers of natural gas. For instance, the Municipal Gas Authority of Georgia (MGAG) complained that its hedging costs with abnormally high winter natural gas prices caused its consumers losses of $18 million during the winter of 2006-2007. Third, the failure raised new concerns about risk management and leverage. In particular, it raised questions about how large a position and influence an individual entity should have over a financial market, like the natural gas futures
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