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July 24, 2006 at 08:00 PM
WASHINGTON (HedgeWorld.com)–The U.S. Securities and Exchange Commission is looking into possible insider trading at Pequot Capital Management, has asked the chief executive of Morgan Stanley, John Mack, for an interview, and has thereby given Gary Aguirre an opportunity to claim some measure of vindication.
The New York Times reported the Pequot investigation June 23, and it was much discussed at a hearing of the Senate Judiciary Committee June 28. But Morgan Stanley acknowledged the SEC’s interest in talking to Mr. Mack only Friday.
“John immediately responded that he is happy to meet with the commission staff, and he welcomes the opportunity to put to rest any issues surrounding this matter,” according to Mr. Mack’s spokeswoman.
The New York Times‘ story was largely based upon a letter written by a former SEC attorney, Gary J. Aguirre, and sent to several members of Congress. That letter claimed that Mr. Aguirre’s investigation of Pequot, based in Westport, Conn., ran into an administrative wall last summer when he decided that he needed the testimony of Mr. Mack.
On Friday, subsequent to the Morgan Stanley statement, Joanne Royce of the Government Accountability Project, a whistleblower protection organization that has been representing Mr. Aguirre, commented on this development. “I sincerely hope that the [Senate] Banking Committee, with its oversight jurisdiction, does what it can so other ethical SEC staffers won’t have to pay the price that Mr. Aguirre paid.” The Banking Committee has a hearing on the regulation of hedge funds scheduled for Tuesday [July 25]–this news will likely impact those proceedings.
Ms Royce also said, according to the statement, that the SEC’s inspector general has informed her that it has reopened its investigation into Mr. Aguirre’s charges of favoritism and retaliation and will likely interview Mr. Aguirre.
