Post by ginger on Aug 31, 2006 12:22:32 GMT -4
SEC agrees to share hedge-fund probe info with Senate
By Siobhan Hughes
Last Update: 6:10 PM ET Aug 30, 2006
WASHINGTON (MarketWatch) -- The Securities and Exchange Commission has agreed to share some internal memos and make available staff for interviews with Senate investigators probing whether a hedge-fund investigation was derailed because of political interference, according to a Senate spokeswoman.
The decision came after Senate Finance Committee Chairman Charles Grassley, R-Iowa, wrote to SEC Chairman Christopher Cox and expressed concern that the SEC was imposing "unnecessary delays" in responding to lawmakers.
"Chairman Grassley has received word from Chairman Cox that the Securities and Exchange Commission intends to cooperate with the request Chairman Grassley made with (Senate Judiciary Chairman Arlen Specter) for documents and interviews related to the allegations of former SEC attorney Gary Aguirre concerning the SEC's review of a major hedge fund," a spokesman for Grassley said in a statement. "Senate Finance Committee investigators are working to review documents received already and plan to conduct a number of interviews on the matter."
The lawmakers are looking into complaints by Aguirre that his supervisor reversed course and prevented him from issuing a subpoena to John Mack, then at Credit Suisse First Boston and now chief executive of Morgan Stanley (MS). Aguirre claimed that the SEC supervisor cited Mack's powerful political connections.
Mack is a longtime friend of Pequot Capital Management head Arthur Samberg. Pequot was being investigated for possible insider trading.
The SEC previously has said that no one has ever tried to exert improper influence in an investigation, and has said publicly that it hopes to assure lawmakers of the fairness and integrity of its processes for handling investigations. It hasn't elaborated further, citing a policy of not commenting on investigations.
Grassley and Specter, R-Pa., had asked to interview six SEC staffers, including SEC enforcement director Linda Thomsen and two supervisors, Mark Kreitman and Robert Hanson. They also asked for numerous documents, including internal SEC emails pertaining to the probe of Pequot.
It wasn't clear whether the SEC agreed to make everyone available for interviews or whether the SEC voted to share all the documents requested by Senate investigators.
The senators also are probing the SEC inspector general's handling of the matter. The SEC's inspector general earlier this year closed an investigation without finding any evidence of wrongdoing, but has since reopened the investigation. Grassley has expressed concern about the thoroughness of the inspector general's investigation.
The SEC originally was scheduled to vote on the matter on Aug. 29. However, on Wednesday, the SEC in a daily news release indicated that it dropped the matter from the schedule. An SEC spokesman declined to comment on why the SEC held the vote earlier.
By Siobhan Hughes
Last Update: 6:10 PM ET Aug 30, 2006
WASHINGTON (MarketWatch) -- The Securities and Exchange Commission has agreed to share some internal memos and make available staff for interviews with Senate investigators probing whether a hedge-fund investigation was derailed because of political interference, according to a Senate spokeswoman.
The decision came after Senate Finance Committee Chairman Charles Grassley, R-Iowa, wrote to SEC Chairman Christopher Cox and expressed concern that the SEC was imposing "unnecessary delays" in responding to lawmakers.
"Chairman Grassley has received word from Chairman Cox that the Securities and Exchange Commission intends to cooperate with the request Chairman Grassley made with (Senate Judiciary Chairman Arlen Specter) for documents and interviews related to the allegations of former SEC attorney Gary Aguirre concerning the SEC's review of a major hedge fund," a spokesman for Grassley said in a statement. "Senate Finance Committee investigators are working to review documents received already and plan to conduct a number of interviews on the matter."
The lawmakers are looking into complaints by Aguirre that his supervisor reversed course and prevented him from issuing a subpoena to John Mack, then at Credit Suisse First Boston and now chief executive of Morgan Stanley (MS). Aguirre claimed that the SEC supervisor cited Mack's powerful political connections.
Mack is a longtime friend of Pequot Capital Management head Arthur Samberg. Pequot was being investigated for possible insider trading.
The SEC previously has said that no one has ever tried to exert improper influence in an investigation, and has said publicly that it hopes to assure lawmakers of the fairness and integrity of its processes for handling investigations. It hasn't elaborated further, citing a policy of not commenting on investigations.
Grassley and Specter, R-Pa., had asked to interview six SEC staffers, including SEC enforcement director Linda Thomsen and two supervisors, Mark Kreitman and Robert Hanson. They also asked for numerous documents, including internal SEC emails pertaining to the probe of Pequot.
It wasn't clear whether the SEC agreed to make everyone available for interviews or whether the SEC voted to share all the documents requested by Senate investigators.
The senators also are probing the SEC inspector general's handling of the matter. The SEC's inspector general earlier this year closed an investigation without finding any evidence of wrongdoing, but has since reopened the investigation. Grassley has expressed concern about the thoroughness of the inspector general's investigation.
The SEC originally was scheduled to vote on the matter on Aug. 29. However, on Wednesday, the SEC in a daily news release indicated that it dropped the matter from the schedule. An SEC spokesman declined to comment on why the SEC held the vote earlier.