Hedge Hogs: The Cowboy Traders Behind Wall Street's Largest Hedge Fund Disaster
Hedge funds, once an obscure investment vehicle confined to the ultrarich with a penchant for risk, have ballooned to a $2 trillion industry in recent years, as ordinary pension and retirement money have been poured into these unregulated funds. One of these funds, Amaranth Advisors, managed $9 billion in assets until its collapse in September 2006 owing to oversize holdings in ­natural-gas futures executed by a brash young ­Canadian trader named Brian Hunter. Wall Street analyst Dreyfuss details how Hunter’s manipulation of the natural-gas market not only lost billions of dollars for Amaranth investors but also caused speculative price spikes that took a heavy toll on consumers and business owners. Her work shines light on the little-known sector of unregulated energy trading in the wake of Enron, where reckless traders continue to take enormous risks with investors’ money and wreak havoc in energy-commodities markets, which are essential to the lives and livelihoods of ordinary Americans. --David Siegfried