PEOPLE - Message Trail

Natural-gas traders like to boast that theirs is a volatile market in which fortunes can be made or lost in seconds. It's the kind of environment where fast communications are key. For regulators investigating the collapse of hedge fund Amaranth Advisors, communications are also proving to be critical.

The Federal Energy Regulatory Commission and the Commodities Futures Exchange Commission last month accused Amaranth and its star trader, Brian Hunter, of trying to manipulate the market for natural-gas futures.

FERC chairman Joseph Kelliher says the agency began looking into Amaranth after discovering that it was responsible for unusually heavy selling of March 2006 futures contracts just before they expired. Transcripts of instant messages sent by Calgary, Alberta°©based Hunter to his traders in Greenwich, Connecticut, are included in the regulator's complaint, which seeks $291 million in penalties and disgorged profits. "The IMs show clear intent to manipulate the gas market, and they are from Mr. Hunter," says Kelliher.

Hunter's attorney, Michael Kim, denied the charges and said the messages were "pulled out of context, to paint a misleading picture."