Amaranth sues JPMorgan for defamation, breach of contract

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Amaranth Advisors, the multistrategy hedge fund that caved in last year on misplaced natural gas bets, has sued JPMorgan Chase for more than $1 billion.

The complaint, filed on November 13 in the New York State Supreme Court in Manhattan, claims that JPMorgan, as Amaranth’s clearing broker and sole futures commission merchant, unfairly took advantage of the hedge fund firm during its natural-gas derivatives trading crisis in September 2006.

According to the complaint, JPMorgan thwarted a proposed deal with Goldman Sachs, which would have allowed Goldman to take over the risks of Amaranth’s natural gas positions.

JPMorgan also effectively