US - The San Diego County Employees Retirement Association (SDCERA) has said it will appeal against a New York court decision preventing it from recouping its investment in a collapsed hedge fund.
The state pension fund sued US hedge fund Amaranth Advisors for securities fraud in 2007 after the hedge fund's spectacular collapse the year before wiped out a multi-million dollar investment. (Global Pensions, March 30, 2007).
It had invested US$175m in the hedge fund in 2005 but a year later Amaranth was forced to close down after losing about $6bn within days on disastrous trades in gas futures.
The court ruled that the SDCERA contract with Amaranth contained routine disclaimers on the level of investment risk and therefore dismissed the lawsuit.
But the pension fund argues that the disclaimers "did not excuse the type of excessive and unreasonable conduct" that led to Amaranth's collapse.
"We're disappointed with the court's ruling," said chief executive officer Brian White.
"None of those disclaimers advised us that Amaranth was going to break the law," he added.
Last year, the US energy commission and the Commodity Futures Trading Commission approved a settlement with Amaranth that required it to pay a fine of more than $7m for manipulating prices on the gas market.
In January this year an administrative law judge found that one of Amaranth's energy traders, Brian Hunter, violated federal law.
It is thought that the San Diego pension scheme, which looks after the retirement benefits of about 36,000 current and former civil servants, is still looking to recover about $85m from Amaranth.
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