Good point we do have too many laws, we don't need many more. Maybe a law is the wrong word. How about a rule about turds who blow out accounts of OPM not being allowed to trade? definetly not raise money. If I got your rich grandma to invest 20 % of her assets with my hedge fund, buy a nati gas lottery ticket with all the money, the lottery doesn't come in. Grandma was an accredited investor because she had a few million, yet has no clue on what she just bought into. As it sits now its too bad, you should have known by the hedge funds literature that we have a lottery player investing your money. Now he can do it again? Sure can, its grandmas fault not the hedge fund managers.
It's not any different from CEOs running companies into the ground, getting a multi-million resignation package and receiving another CEO position at a new company. Another exclusive club that is very hard to break into without strong connections.
He experienced something that other people can't. From experiences, there are lessons learned... other than that... it's what surf writes above... and having the right sales pitch to the investors who will ask about the Amaranth loss and news... I think he'll do good due to most people interested in "What really happened, at Amaranth."
Nick Leeson was released from a Singapore jail back in 1999, after serving 4 years of his sentence. According to an interview he gave a few weeks ago, "You wouldn't believe how many people have asked me to manage their money." http://www.elitetrader.com/vb/showthread.php?s=&threadid=88897
Just think about the number of people who throw small fortunes at Nigerian 419 scammers, guys who make Nick Leeson look like a saint.
Leeson wrote a book in 2005 called "back from the brink -coping with stress" regarding his time in prison and his diagnosis of Cancer. Was written jointly with himself and a well known psychologist in the UK.
I think the goal is to know better and not have that experience. No, it's really more about the fact that he is part of the social/professional circle and that gives a certain esoteric level of approval. He is known, he has socialized with the circle, he has their trust, etc. He is not some random guy walking through the door of whom noone has heard of. Simply an issue of feeling comfortable with the person. It's obvious he has zero intentions to steal or embezzle funds. Now whether he can prevent blowing up, well, apparently that's less of a concern. It must be noted that he did stay within Amaranth risk parameters, after all, his pure expertise was natural gas supply. I know he was getting interviews just because he made the headlines. People were interested just to see what's up and meet this guy.
Agree with most of your post, except this. Let's glance at the big picture once again, shall we... Brian Hunter went balls to the wall (roughly 8:1 leverage, depending on your source) on a bullish shoulder month natty spread (Mar-Apr), while it inconveniently decided to collapse from $2.49 to $0.75 in just the first 2 weeks of September. That pesky spread went even lower, to end the month around $0.58, but Amaranth was pretty much finished by the 18th, down 65%, from being up 25% YTD at the end of August. If such astonishing ignorance or reckless disregard (hmm, which is worse? take your pick) of the most basic, rudimentary, newby-yawning concepts of money management, position sizing and risk of ruin -- not to mention such mind-blowing NAV swings -- can be characterized as staying within any fund's (Amaranth, Solengo, you name it) risk parameters... then, yeah, Mr. Hunter has a very long, bright professional future ahead of him indeed. What's 5 or 6 Billion dollars between friends?
I dont know much about futures/ options, but when he was with Amaranth, why wern't his gas futures hedged with future options?....isn't that a way to "insure" a position incase of a downturn?. Say if he were long gas futures, then buy puts for the same contract... cm