New York – Amaranth Advisors has been sued by the San Diego County retirement fund for securities fraud, a step that the hedge fund firm said might delay refunds to clients hurt when Amaranthcollapsed under $6.6 billion in losses in September.<\/p>\n
Amaranth lied about trading strategies and made “excessively risky and volatile investments,” according to a complaint filed last week by the San Diego County Employees Retirement Association. Amaranth said that fighting the lawsuit – the first tied to its failure, which was the largest in the history of the hedge fund industry – will drain remaining assets earmarked for investors.<\/p>\n
The complaint, filed in U.S. District Court in New York, seeks damages of at least $150 million, based on the retirement plan’s $175 million investment made two years ago. Amaranth has yet to refund $630 million, or about 23 percent, of the assets it held as of Sept. 30, Nicholas Maounis, the founder of the firm, told clients in a letter Thursday.<\/p>\n