The SEC has given itself a clean bill of health in the handling of the Pequot Capital hedge fund investigation. The SEC's inspector general and Senate investigators reached the opposite conclusion in their independent probe of the matter.

SEC inspector general pointedly recommended disciplinary action against SEC enforcement chief Linda Thomsen as well as Mark Kreitman assistant enforcement director and Robert Hanson the supervisor of whistleblowing SEC lawyer, Gary Aguirre.

Given the contradictory conclusion, inspector Kotz and the Senator Charles Grassley who had orignially requested the Senate investigation of the matter both balked at the outcome of the SEC's administrative proceeding.

So what was Gary Aguirre blowing the whistle on in the first place? In a nutshell:

Aguirre was the lead attorney in an investigation of suspicious trades at hedge fund Pequot Capital. In pursuit of the investigation Aguirre sought to interview John Mack, chief executive of Morgan Stanley and longtime friend of Arthur Samberg, founder of Pequot.

According to Aguirre, his SEC higher-ups declared hands-off on Mack. When Aguirre pushed the point, he claims he was fired. His subsequent whistleblowing resulting in congressional hearings, which have in turn produced several reports highly critical of the SEC's conduct in the matter.

For a full recap of our Pequot coverage click here.

-- MDT

Labels: Gary Aguirre, John Mack, Pequot Capital

You may recall that one Gary Aguirre was the lead attorney in the investigation of suspicious trades at hedge fund Pequot Capital. In conjunction with his investigation, Aguirre was to interview John Mack, (then prospective and now current) chief executive of Morgan Stanley and a known friend of Arthur Samberg, founder of Pequot.

Under pressure from both Pequot and Morgan Stanley lawyers, SEC higher-ups declared hands-off on Mack. Aguirre pushed the point and was fired. His subsequent whistleblowing resulting in congressional hearings, which have in turn produced a report highly critical of the SEC's conduct in the matter.

The report from the Senate Finance and Judiciary committee supports the contentions of former SEC lawyer, Aguirre that the SEC doesn't treat all potential witnesses the same. Moreover the SEC showed "undue deference" to a Wall Street big-shot and botched what had been a promising investigation.

Get further details on the Pequot report from the New York Times. Also, check out the tags below for mucho background on the Prequot story.

-- MDT

Labels: Arthur Samberg, Gary Aguirre, John Mack, Pequot Capital, SEC

What a stir Gary Aguirre created when he began making noise that his investigation into insider trading at Pequot Capital was quashed by SEC higher-ups when Aguirre suggested that the scheme may have involved Wall Street heavyweight, John Mack, patriarch of Morgan Stanley.

Aguirre claimed that he was told in no uncertain terms to leave Mack alone, a course of action he was disinclined to accept.. In the ensuing flap saw a fired (and fired-up Aguirre) turn whistleblower and testify before congress about conflict of interest issues at his former employer.

Well, Mr Aguirre is still hitting hard on what he believes are serious issues with the SEC's enforcement regime. Characteristically, he doesn't pull any punches in this interview with The Guardian.

For more background on Aguirre, try the tags below...

-- MDT

Labels: corruption, Gary Aguirre, homeland security, John Mack, whistleblower

And they ain't happy. Back in July the Senate began looking into the SEC's insider trading investigation of hedge fund, Pequot Capital after complaints from former SEC investigator, Gary Aguirre,

Aguirre alleged that he was discouraged by agency higher ups from pursing information from John Mack, Morgan Stanley grand poo-bah and good buddy to Pequot founder, Arthur Samburg. Aguirre was eventually fired by the SEC and turned whistleblower, telling his tale loud and long for anyone who would listen.

The Senate listened and after extensive hearings, they've filed a report highly critical of the SEC. The NYT has a summary.

Try clicking on the tags below for further background...

-- MDT

Labels: Arthur Samberg, Gary Aguirre, homeland security, insider trading, investigation, John Mack, Pequot Capital

Gary Aguirre finally gets some on-the-record back-up from former colleagues (scorn from others) and SEC official, Robert Hanson faces some tough questions...Details at Bloomberg.

Need a little background? Need a lot?

-- MDT

Labels: Gary Aguirre, John Mack, Morgan Stanley, Pequot Capital

You don't mess with the GAO. I love those guys.

As The Daily Caveat discussed earlier this week, whether or not the SEC gave preferential treatment to Pequot's Samberg and Morgan Stanley's Mack is quite the touchy subject. Fired SEC eforcement officer, Gary Aguirre certainly thought so and so does Senator Charles Grassley, whose requests prompted the GAO investigation. More details here.

-- MDT

Labels: Arthur Samberg, GAO, Gary Aguirre, Morgan Stanley, Pequot Capital

It as been a while since we had an update on the insider trading allegations that continue to surround Morgan Stanley CEO, John Mack and hedge fund, Pequot Capital (details here). The SEC itself has been taking some heat relating to the case, due to the comments of former SEC enforcement officer, Gary Aguirre, who has asserted that he was disuaded (and ultimately fired by his bosses) when it came time to interview Mack.

Aguirre had named Mack as the key individual in tipping off Pequot founder and Mack personal friend Arthur Samburg regarding General Electric's acquisition of Heller Capital, the transaction to which the insider trading charges pertain. The heat on the SEC doesn't appear to have dissipated one iota, with the release of new documents detailing the process of the agency's investigation as well as their handling of Aguirre's departure. Very interesting reading.

Amongst the most disturbing revelations - Samburg uses emoticons in business correspondence. Six smiley faces? Egads.

-- MDT

Labels: Gary Aguirre, insider trading, John Mack, Morgan Stanley, Pequot Capital

Senators weigh in on behalf of SEC whistleblower, Gary Aguirre. Aguirre created quite a stir when he alleged that, as an SEC staff attorney, he was encouraged not to pursue an insider trading investigation involving Morgan Stanley CEO John Mack and his connections to hedge fund powerhouse, Pequot Captial. Aguirre was subsequently fired, which lead to the aforementioned whistleblowing.

Now two senators, Arlen Spector (who is increasingly finding his feisty) and Charles Grassley have sent a letter to the SEC on Aguirre's behalf, asking the commission to provide a full accounting of what went down. More on their request, here, via Marketwatch.

-- MDT

Labels: Gary Aguirre, insider trading, John Mack, Morgan Stanley, Pequot Capital

Morgan Stanley Chief Executive Officer, John Mack remains at the center of insider trading allegations that continue to dog hedge fund, Pequot Capital Management. Former SEC Investigator Gary Aguirre has alleged that Mack was amongst the high-level personnel SEC officials dissuaded Aguirre from interviewing prior to his departure from the commission. Mack has been fingered by Aguirre as one who tipped off Pequot regarding General Electric's acquisition of Heller Capital. Prior to joining Morgan Stanley, Mack worked for Pequot briefly and is friends with Pequot founder, Arthur Samberg.

More here on Mack's date with the SEC and for more on Aguirre, try Wall Street Folly.

-- MDT

Labels: Arthur Samberg, Gary Aguirre, insider trading, John Mack, Morgan Stanley, Pequot Capital

Well now this is likely to heat up...

Gary Aguirre, the former SEC attorney who headed the investigation into Pequot Capital Management Inc (which is currently facing insider trading charges) has claimed in Congressional testimony that he was told by higher-ups at the SEC to lay off Pequot because the fund's "very powerful political connections" would have made pursuing the case difficult. Aguirre was subsequently fired from the SEC and to say relations between he and his former employer have been...tense...would not be an understatement. Meanwhile, SEC hedge fund regulation seems to be vaporizing in the face of a successful court challenge and both federal and state legislators are rattling their sabers and taking matters into their own hands.

Is a turf war brewing? And what of Pequot?

-- MDT

Labels: Gary Aguirre, insider trading, Pequot Capital