On April 27, Judge Shira Scheindlin of the U.S. District Court for the Southern District of New York revived certain previously dismissed claims alleging that defendants manipulated the prices of natural gas futures contracts in violation of the Commodity Exchange Act. The claims were made against Amaranth Advisors LLC, funds it advised and certain other parties in a class action suit on behalf of parties who traded in natural gas futures and options on futures during a certain period in 2006. Plaintiffs had repled various claims after the court’s decision of October 4, 2008, granting defendants’ motions to dismiss the claims. The court denied defendants’ new motion to dismiss the repled claims alleging vicarious liability on the part of Amaranth LLC (a master fund advised by Amaranth Advisors LLC) and affiliated feeder funds (Funds). Judge Scheindlin ruled that vicarious liability claims against the Funds may proceed based on an alleged agency relationship between each Fund and the investment advisory entities and employees who allegedly engaged in market manipulation. She found that the plaintiffs demonstrated sufficiently for the claim to continue the plausibility of an agency relationship with the feeder funds through written advisory agreements, and of an agency relationship with the master fund based on statements made by the master fund in another litigation, which agency relationships could be the basis for vicarious liability of the Funds for acts of the agents.
The ruling can be obtained through PACER