MotherRock to Holders: Go Pound Salt

MotherRock's hedge fund marketing literature had listed ABN Amro(ABN) and Goldman Sachs(GS) as the fund's prime brokers. ABN Amro also is believed to have been an investor in the fund, according to sources.

In recent days, other institutional investors have said they are treating their investment in MotherRock as being worthless. PSolve Alternatives recently told investors it is writing down its MotherRock investment to zero. Dexion Alpha Strategies, another European hedge fund investment firm, took a similar step.

The rapid collapse of MotherRock is an indication of just how volatile, and costly, trading in the energy markets can be.

MotherRock, which was formed in December 2004, opened for business in 2005 with high expectations. Collins founded the fund with John D'Agostino, a former Nymex executive, and former Nymex trader Conrad Goerl. Carol Coale, a former Prudential Equity natural gas analyst, had headed up MotherRock's research team.

Before joining the Nymex, Collins was a senior vice president at El Paso(EP), where he oversaw the energy company's gas trading group.

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