Hedge Fund Withdraws Trade Secret Summons After Concluding its "Evidence" Was Too Shaky to Proceed

The AmLaw Litigation Daily is reporting that Amaranth Advisors LLC, the energy trading hedge fund that lost almost $7 billion in 2006 trading in natural gas, has withdrawn its trade secret misappropriation lawsuit summons against Touradji Capital Management, another

You can see the summons here: http://amlawdaily.typepad.com/AmaranthvTouradji.pdf.

According to the summons, Amaranth and Touradji signed a confidentiality agreement in advance of the transfer of Amaranth's base metals portfolio to Touradji. The transfer was part of Amaranth's ultimately unsuccessful attempt to stave off the biggest hedge fund meltdown in history.

Amaranth's summons suggested that Touradji stole confidential and proprietary trade secrets and trading strategies related to the base metals portfolio. But that's where things get complicated. Touradji claims that Amaranth's would-be suit was based on information from two former Touradji employees who are in the middle of their own New York state court litigation with Touradji. Those two former employees are being sued for slander/defamation.

Seems Amaranth had second thoughts about its summons after it learned from Touradji what Touradji intended to prove about their former employees. Suffice it to say that Amaranth concluded that Touradji had the goods on its former employees and, thus, dropped its summons. You can read here about Touradji's claims against its former employees: http://www.bloomberg.com/apps/news?pid=20601087&sid=aGUg0NEnWXwA&pos=6.