The first stage of a legal action brought by US regulators against Amaranth Advisors will close this week, according to an investor letter that sheds light on the three-year long wind-down of the US hedge fund, which collapsed in 2006 after losing billions of dollars on energy trades.

The US Federal Energy Regulatory Commission brought an administrative proceeding against Amaranth and traders Brian Hunter and Matthew Donohoe in the wake of the fund's collapse, claiming that they manipulated the market for expiring Nymex natural gas futures.