* Traders can sue as group; over 1,000 claimants possible
* Amaranth accused of manipulating futures contracts
* Amaranth collapsed in 2006 after $6.4 billion losses
NEW YORK, Sept 28 A U.S. judge ordered Amaranth
Advisors LLC, a hedge fund that lost $6.4 billion through bad
bets on natural gas prices, to face a class-action lawsuit over
its 2006 collapse.
In a ruling dated on Monday, U.S. District Judge Shira
Scheindlin granted class-action status to futures traders who
bought, sold or held natural gas futures or options on futures
contracts from Feb. 16 to Sept. 28, 2006.
The decision means the traders may sue as a group, which
could save litigation costs and result in a larger recovery
than if they sued individually.
The case "involves more than 1,000 potential claimants who
are asserting claims based on common issues," Scheindlin
wrote. "Claimants likely have no interest in pursuing their own
claims, which may be prohibitively small."
Stephen Schwartz, a lawyer for Amaranth, declined immediate
Amaranth founder Nicholas Maounis is among the defendants
remaining in the case, Scheindlin wrote.
The traders alleged that during the class period, Amaranth
violated U.S. laws governing commodities by manipulating the
prices of New York Mercantile Exchange natural gas futures
Amaranth was based in Greenwich, Connecticut, and once had
more than $9 billion of assets. It still faces lawsuits despite
The case is In re: Amaranth Natural Gas Commodities
Litigation, U.S. District Court, Southern District of New York,
(Reporting by Jonathan Stempel in New York; Editing by