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Post by jannikki on Jan 31, 2007 23:53:36 GMT -4
Senators Question SEC Handling of Probe Wednesday January 31, 9:40 pm ET By Marcy Gordon, AP Business Writer 2 Senators Say Review Raises Serious Questions About SEC's Handling of Probe WASHINGTON (AP) -- Two senior senators said Wednesday that an official review raises serious questions about the Securities and Exchange Commission's handling of an insider-trading investigation and the possibility of a cover-up amid allegations of political interference by SEC officials. Sen. Arlen Specter, R-Pa., the Senate Judiciary Committee chairman in the last Congress, and Sen. Charles Grassley, R-Iowa, a member of the panel, made the statements on the Senate floor in the matter of a fired former SEC attorney who has alleged political meddling in the agency's investigation touching on Wall Street executive John Mack and a major hedge fund. After taking testimony and reviewing thousands of documents, many of them provided by the SEC, the judiciary panel's preliminary findings show "extraordinarily lax enforcement by the SEC and ... may even indicate a cover-up by the SEC," Specter said. The SEC's handling of the matter, including a review of the attorney's allegations by the agency's inspector general, "has all of the earmarks of the obstruction of justice," he said. The matter first came to light last spring when the former attorney, Gary Aguirre, told Congress he was blocked by superiors at the SEC when he tried to question Mack, now chairman of investment house Morgan Stanley, in the insider-trading investigation of hedge fund Pequot Capital Management Inc. It has focused congressional scrutiny on the normally low-profile regulatory agency. SEC spokesman John Nester said Wednesday: "We have not yet had the opportunity to read the interim final report, but we respect and appreciate the oversight role of the Congress and we have fully cooperated at every stage of the review. We will carefully consider the report's findings and recommendations." Grassley, in his remarks in the Senate chamber, thanked SEC Chairman Christopher Cox for his cooperation in providing the documents requested by the Judiciary panel, adding, "I hope that Chairman Cox takes today's findings to heart." "These findings paint a picture of a troubled agency that faces serious questions about public confidence, the integrity of its investigations" and its ability to protect investors large and small evenhandedly, Grassley said. The SEC "circled the wagons and it shot a whistle-blower," he said. At a Judiciary hearing in December, four SEC enforcement officials rejected Aguirre's allegations. But another agency official, also in sworn testimony, bolstered the attorney's claims. The four officials -- Aguirre's supervisors at the agency and Enforcement Director Linda Thomsen -- portrayed him as a hard-charging and aggressive attorney who also was volatile and given to fits of temper, and had trouble accepting the authority of supervisors and working in a structured organization. The investigation was begun in 2005 to determine whether Pequot had received a tip in 2001 from an individual about an upcoming $5.3 billion merger between General Electric Capital Corp. and Heller Financial Inc. Aguirre has pointed to Mack as the likely person who had tipped Pequot to the merger, potentially enabling the hedge fund to buy and sell shares ahead of the announcement and make millions. Securities and Exchange Commission: www.sec.govPequot Capital Management Inc.: www.pequotcap.combiz.yahoo.com/ap/070131/sec_hedge_fund.html?.v=1
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Post by jannikki on Jan 31, 2007 23:58:11 GMT -4
Senate report claims SEC 'obstructed' trading probe By Jeremy Grant in Washington Published: February 1 2007 02:00 | Last updated: February 1 2007 02:00 The Securities and Exchange Commission's handling of an investigation into an insider trading probe had "all the earmarks of an obstruction of justice", an interim report by two leading US senators yesterday said. The regulator has been embroiled in a controversy over whether it blocked Gary Aguirre, a former lawyer in its enforcement division, from seeking testimony from John Mack, Morgan Stanley chief executive, on trades involving hedge fund Pequot Capital. Mr Aguirre was fired after he said he was told by colleagues that his investigation had been blocked. The case has been subjected to three congressional hearings since the controversy erupted six months ago. Chuck Grassley and Arlen Specter, two senators chairing the hearings, launched their own inquiry into the case after their suspicions of a possible SEC cover-up persisted. In releasing their interim findings on the Senate floor, both men said an investigation into Pequot had been "plagued with problems from the beginning to its abrupt conclusion". The sacking of Mr Aguirre had been "highly suspect", while a probe into the events by the SEC's own inspector-general had been "both seriously and fatally flawed". Mr Grassley said: "Taken together, these findings paint a picture of a troubled agency that faces serious questions about public confidence in the integrity of its investigations and its ability to protect all investors large and small. The SEC should have taken Mr Aguirre's allegations more seriously. Instead . . . it circled the wagons and shot a whistleblower - an all too familiar practice in Washington . . . where whistleblowers are as -welcome as a skunk at a -picnic." Both senators called on the SEC to re-open the Pequot case and on the agency to consider "meaningful reforms". A final report would be released "in the near future". SEC spokesman John Nester said: "We have not yet had the opportunity to read the interim final report, but we respect and appreciate the oversight role of the Congress and we have fully co-operated at every stage of the review. We will carefully consider the report's findings and recommendations." Copyright The Financial Times Limited 2007 www.ft.com/cms/s/0dff7fea-b19a-11db-b901-0000779e2340.html
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Post by kranker on Feb 1, 2007 0:18:31 GMT -4
"These findings paint a picture of a troubled agency that faces serious questions about public confidence, the integrity of its investigations" and its ability to protect investors large and small evenhandedly, Grassley said. The SEC "circled the wagons and it shot a whistle-blower,"
Sen. Charles Grassley
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Post by kranker on Feb 1, 2007 0:20:10 GMT -4
I think we might actually have 2 Senators that are not bought and paid for by Wall Street. Other than Orin Hatch, they are the only two I know of, period!
And the press is reporting it. I am "astonished"
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Post by kranker on Feb 1, 2007 0:21:20 GMT -4
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Post by jannikki on Feb 1, 2007 2:30:45 GMT -4
2 Senators Renew Attacks on S.E.C. Hedge Fund Investigation By WALT BOGDANICH Published: February 1, 2007 Two prominent Republican senators renewed their criticism yesterday of the way the Securities and Exchange Commission carried out its investigation into a major hedge fund, Pequot Capital Management. In separate speeches on the Senate floor, the senators, Arlen Specter of Pennsylvania and Charles E. Grassley of Iowa, said the S.E.C. — which filed no charges against Pequot — had failed to aggressively follow up on investigative leads developed by the lawyer who led the inquiry, Gary J. Aguirre. Both senators said their statements reflected the findings of an interim report, which is expected to be released today, on their investigation of the S.E.C.’s conduct in the case. The hedge fund came under regulatory scrutiny in late 2004 when Mr. Aguirre began investigating several profitable trades made by Pequot in advance of mergers or other market-moving news. The Pequot trades were flagged by stock exchange surveillance teams and forwarded to the commission. The S.E.C. fired Mr. Aguirre in September 2005 after he complained that his investigation had been derailed by outside political influence. “The S.E.C. should have taken Mr. Aguirre’s allegations seriously,” Mr. Grassley said. “Instead, it circled the wagons and shot the whistle-blower — an all-too-familiar practice in Washington.” Mr. Specter called on the S.E.C. to reopen its investigation of Pequot, citing what he called “conclusive proof” that political considerations had figured in the agency’s decision to delay taking the testimony of an influential Wall Street executive, John J. Mack. The commission did eventually interview Mr. Mack, but only after Mr. Aguirre criticized it in letters to Congress. “The overwhelming evidence in the matter showed that the testimony should have been taken at a much earlier stage,” Mr. Specter said. The S.E.C. closed its investigation without filing any charges against Mr. Mack or anyone else connected with the Pequot matter. An S.E.C. spokesman, John Nester, said he had not yet had the chance to read the interim report, but he said the commission would “carefully consider the report’s findings and recommendations.” Mr. Nester said the commission had cooperated fully with Congressional investigations, a statement echoed by Mr. Grassley. The S.E.C.’s investigation “was plagued with problems from its beginning to its abrupt conclusion,” Mr. Grassley said. “The termination of Mr. Aguirre by the S.E.C. was highly suspect given the timing and circumstances.” Both senators had particularly harsh words for the S.E.C.’s inspector general, Walter J. Stachnik. Mr. Specter said that in all his years in the Senate he could not recall “an I.G. who said less, did less and was thoroughly inadequate in the investigation.”
He mocked what he said was the inspector general’s defense — that it was not his responsibility to second-guess certain S.E.C. decisions. “Well, that’s the purpose of having an I.G.,” Senator Specter said. Mr. Stachnik declined to comment last night. www.nytimes.com/2007/02/01/business/01hedge.html?ref=business[glow=red,2,300]It's been nice knowing you, Mr. Stachnik.....NOT! [/glow]
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Post by jannikki on Feb 2, 2007 6:16:37 GMT -4
Senate Report Says S.E.C. Botched Hedge Fund Inquiry By WALT BOGDANICH Published: February 2, 2007 The Securities and Exchange Commission mishandled its inquiry into suspect trades by a prominent hedge fund, then may have tried to cover up those mistakes after its chief investigator on the case complained, according to an interim Senate report released yesterday. Gary J. Aguirre, an investigator, was fired by the S.E.C. The report, released by the former chairmen of the Senate Judiciary and Finance Committees, Arlen Specter of Pennsylvania and Charles E. Grassley of Iowa, also asked the S.E.C. or the Justice Department to consider investigating whether false testimony was given to S.E.C. officials who examined the hedge fund, Pequot Capital Management. The report did not cite examples of what testimony might have been false. The two Senate committees began looking into the case in July after the investigator, a commission lawyer named Gary J. Aguirre, said he was fired for complaining that the Pequot investigation had been derailed because of political considerations. Though the S.E.C.’s handling of the Pequot matter came under fire at Senate hearings last year, yesterday’s report provides the strongest condemnation yet of how that investigation was run. “At best, the picture shows extraordinarily lax enforcement by the S.E.C.,” Senate investigators concluded. “At worse, the picture is colored with overtones of a possible cover-up.” The report strongly suggests that Mr. Aguirre was fired in retaliation for his criticism. At the same time, Senate investigators said they were “deeply troubled” by the failure of the S.E.C.’s inspector general, Walter J. Stachnik, to investigate Mr. Aguirre’s accusations properly. “The I.G. spoke only to Aguirre’s supervisors, accepted everything they said at face value and reviewed only documents identified by those supervisors,” the report concluded. “We believe the S.E.C. must take corrective and preventative action to ensure that future investigations, internal and external, do not follow the same path as the Pequot matter.” The S.E.C. should also consider reopening its Pequot investigation, the report states, though it takes no position on whether the fund or anyone connected to it engaged in any wrongdoing. The S.E.C. closed its inquiry without charging anyone in connection with the Pequot inquiry. John J. Nester, a spokesman for the S.E.C., said in a statement that because the matter was under review by other federal entities, which he did not name, the commission would have no comment. The report, which is based largely on Senate interviews with 19 crucial witnesses and thousands of pages of internal S.E.C. records, is a victory for Mr. Aguirre, who was fired in September 2005, just days after receiving a merit pay increase. At a Senate hearing in December, senior S.E.C. officials sought to justify his firing, arguing that he had done a poor job running the Pequot investigation and that he had been difficult to get along with. The officials asserted that Mr. Aguirre had once issued flawed subpoenas and that he had been unprofessional in the way he conducted an interview with Pequot’s founder, Arthur J. Samberg. There was scant documentary evidence to back up those charges, the report concluded. “We have noted the considerable lack of contemporaneous documents corroborating the concerns they raised,” it said. S.E.C. officials said the flawed subpoenas had seriously undermined their confidence in Mr. Aguirre. But, the report noted, those officials “produced no documents to the committees suggesting that they viewed it that way at the time.” The same held true for the examination of Mr. Samberg. In fact, the report states, one longtime S.E.C. investigator told the committee that he planned to use Mr. Aguirre’s examination “as a model for how to take testimony in his training of new S.E.C. attorneys.” The report called Mr. Aguirre “a smart, hardworking, aggressive attorney who was passionately dedicated to the Pequot investigation.” Mr. Aguirre testified that his troubles at the S.E.C. began when he asked for permission to examine John J. Mack, an influential Wall Street executive who was a close friend of Mr. Samberg. After initially supporting Mr. Aguirre’s decision, senior S.E.C. officials abruptly changed course, the report notes. “What is troubling is how this enthusiasm waned after public reports on June 23, 2005, that Morgan Stanley was considering hiring Mack as its new C.E.O.,” the report concludes. Mr. Aguirre was told that since he had no evidence linking Mr. Mack to suspected insider trading by Pequot, calling in Mr. Mack for an interview would not be justified. “The purpose of taking investigative testimony is not to confront a witness with accusations of wrongdoing, as Aguirre’s supervisors seem to believe,” the report states. “Rather it is to gather information that helps confirm or rule out working theories.” Mr. Mack and Mr. Samberg have repeatedly denied any improper conduct. Mr. Mack’s testimony was eventually taken in August 2006, more than a year after Mr. Aguirre proposed doing so. “We are concerned about the circumstances under which it was done,” investigators said. “Mack’s testimony was taken five days after the statute of limitations expired, and only a few months after we initiated our inquiry into this matter.” The report concludes that the S.E.C. finally interviewed Mr. Mack to deflect public criticism for not having done it earlier. www.nytimes.com/2007/02/02/business/02hedge.html?ref=business
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Post by jannikki on Feb 2, 2007 18:22:06 GMT -4
TOP STORY: Senate Report Blasts SEC Over Pequot Investigation A Senate report released yesterday strongly chastises the Securities and Exchange Commission for its investigation into allegations of insider trading at hedge fund Pequot Capital Management. The report goes as far as to intimate that the SEC fired the lead investigator on the case, Gary Aguirre, because he went public with his concerns related to the investigation. The investigation into whether Pequot Capital traded on inside information went off the rails when Aguirre tried to interview John Mack, the former chairman of Pequot who now is the chairman and chief executive of Morgan Stanley [ticker: MS]. Mack is close friends with Arthur Samberg, Pequot's founder. Aguirre's supervisors denied the request to interview Mack, and then subsequently fired the investigator. Those supervisors said during a Senate hearing that Aguirre was fired because he had performed poorly during the investigation. The report dismissed that justification, calling Aguirre "a smart, hardworking, aggressive attorney who was passionately dedicated to the Pequot investigation." www.banknet360.com/news/NewsAbstract.do?na_id=7323&service_id=1&bi_id=
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Post by claymof on Feb 2, 2007 18:39:09 GMT -4
Your delusional... Read Story and Symanski, you should KNOW by now that the media is in bed with the huge evil corporations and would never report on a scandal of this magnitude. You only dreamed this. Look into my eyes.... my eyes... you're getting sleeeepy... I think we might actually have 2 Senators that are not bought and paid for by Wall Street. Other than Orin Hatch, they are the only two I know of, period! And the press is reporting it. I am "astonished"
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Post by jannikki on Feb 2, 2007 18:41:00 GMT -4
Another SEC witness backs Aguirre By Dan Jamieson February 2, 2007 Another witness has backed Gary Aguirre, the former SEC investigator who claims he was fired from the agency after demanding in 2005 to interview John Mack in an insider trading case. Mr. Aguirre claimed his superiors cooled to the idea of quizzing Mr. Mack, now chief executive at Morgan Stanley, after they learned Mr. Mack was under consideration for the top spot at the big brokerage firm. Joseph Cella, chief of SEC market surveillance, backed up Mr. Aguirre's claim that Mr. Mack should have been interviewed. Mr. Cella's support of Mr. Aguirre's claims was first revealed in an interim Senate report released late Wednesday. SEC officials have argued that Mr. Aguirre did not have enough evidence to interview Mr. Mack about the executive's suspected role in insider trading by the hedge fund Pequot Capital Management Inc. of Westport, Conn. But Mr. Cella told Senate investigators that, ``it seemed to me that it was a reasonable thing to do to bring Mack in and have him testify,'' and ``in my mind there was no down side.'' Mr. Mack was a longtime investor in Pequot and was close to its chief executive Arthur Samberg. Another witness, former SEC investigator Hilton Foster, told Senate investigators that, ``As the SEC expert on insider trading, if people had asked me, `When do you take his testimony,' I would have said take it yesterday.'' In addition, Eric Ribelin, an SEC market surveillance branch chief, has also publicly backed Mr. Aguirre's push to interview Mr. Mack. The report made no conclusion about Mr. Mack's role in the case. The SEC dropped the Pequot inquiry last fall for lack of evidence. Sen. Arlen Specter (R-Pa.), said in a floor statement Wednesday that although the statute of limitations has run out on the case, other remedies such as disgorgement should be pursued. He and Sen. Charles Grassley (R-Iowa) said the SEC had cooperated in the Senate investigation. In a statement, SEC spokesman John Nester said the SEC would “carefully consider the report's findings and recommendations." www.investmentnews.com/apps/pbcs.dll/article?AID=/20070202/FREE/70202015
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Post by kranker on Feb 2, 2007 23:49:59 GMT -4
Your delusional... Read Story and Symanski, you should KNOW by now that the media is in bed with the huge evil corporations and would never report on a scandal of this magnitude. You only dreamed this. Look into my eyes.... my eyes... you're getting sleeeepy... I think we might actually have 2 Senators that are not bought and paid for by Wall Street. Other than Orin Hatch, they are the only two I know of, period! And the press is reporting it. I am "astonished" The worm is turning claymof... BOO!
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Post by jannikki on Feb 3, 2007 7:56:08 GMT -4
Your delusional... Read Story and Symanski, you should KNOW by now that the media is in bed with the huge evil corporations and would never report on a scandal of this magnitude. You only dreamed this. Look into my eyes.... my eyes... you're getting sleeeepy... The worm is turning claymof... BOO!
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Post by jannikki on Feb 4, 2007 15:48:27 GMT -4
It's an international story now! 2 senators assail securities commission By Walt Bogdanich Published: February 1, 2007 Two leading Republican U.S. senators have renewed their criticism of the way the Securities and Exchange Commission carried out its investigation into a well-known hedge fund, Pequot Capital Management. In speeches on the Senate floor Wednesday, Arlen Specter of Pennsylvania and Charles Grassley of Iowa said the regulatory commission, which filed no charges against Pequot, had failed to follow up aggressively on investigative leads developed by the lawyer who led the inquiry, Gary Aguirre. Both senators said their statements reflected the findings of an interim report, which was expected to be released Thursday, on their investigation of the commission's conduct in the case. The hedge fund came under regulatory scrutiny in late 2004 when Aguirre began investigating several profitable trades made by Pequot in advance of mergers or other market-moving news. The Pequot trades were flagged by stock exchange surveillance teams and forwarded to the commission. The commission fired Aguirre in September 2005 after he complained that his investigation had been derailed by outside political influence. "The SEC should have taken Mr. Aguirre's allegations seriously," Grassley said. "Instead, it circled the wagons and shot the whistle-blower — an all- too-familiar practice in Washington." Specter called on the commission to reopen its investigation of Pequot, citing what he called "conclusive proof" that political considerations had figured in the agency's decision to delay taking the testimony of an influential Wall Street executive, John Mack. The commission did eventually interview Mack, but only after Aguirre criticized it in letters to Congress. The commission closed its investigation without filing any charges against Mack or anyone else. A commission spokesman, John Nester, said he had not yet read the interim report, but he said the agency would "carefully consider the report's findings and recommendations." He said the commission had cooperated fully with congressional investigations. Grassley said that the commission's investigation "was plagued with problems from its beginning to its abrupt conclusion." He added, "The termination of Mr. Aguirre by the SEC was highly suspect, given the timing and circumstances." Both senators had particularly harsh words for the agency's inspector general, Walter Stachnik. Specter said that in all his years in the Senate he could not recall "an IG who said less, did less and was thoroughly inadequate in the investigation." Stachnik declined to comment. www.iht.com/articles/2007/02/01/business/hedge.php
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Post by kranker on Feb 5, 2007 20:02:06 GMT -4
Another SEC witness backs Aguirre By Dan Jamieson February 2, 2007 Another witness has backed Gary Aguirre, the former SEC investigator who claims he was fired from the agency after demanding in 2005 to interview John Mack in an insider trading case. Mr. Aguirre claimed his superiors cooled to the idea of quizzing Mr. Mack, now chief executive at Morgan Stanley, after they learned Mr. Mack was under consideration for the top spot at the big brokerage firm. Joseph Cella, chief of SEC market surveillance, backed up Mr. Aguirre's claim that Mr. Mack should have been interviewed. Mr. Cella's support of Mr. Aguirre's claims was first revealed in an interim Senate report released late Wednesday. SEC officials have argued that Mr. Aguirre did not have enough evidence to interview Mr. Mack about the executive's suspected role in insider trading by the hedge fund Pequot Capital Management Inc. of Westport, Conn. But Mr. Cella told Senate investigators that, ``it seemed to me that it was a reasonable thing to do to bring Mack in and have him testify,'' and ``in my mind there was no down side.'' Mr. Mack was a longtime investor in Pequot and was close to its chief executive Arthur Samberg. Another witness, former SEC investigator Hilton Foster, told Senate investigators that, ``As the SEC expert on insider trading, if people had asked me, `When do you take his testimony,' I would have said take it yesterday.'' In addition, Eric Ribelin, an SEC market surveillance branch chief, has also publicly backed Mr. Aguirre's push to interview Mr. Mack. The report made no conclusion about Mr. Mack's role in the case. The SEC dropped the Pequot inquiry last fall for lack of evidence. Sen. Arlen Specter (R-Pa.), said in a floor statement Wednesday that although the statute of limitations has run out on the case, other remedies such as disgorgement should be pursued. He and Sen. Charles Grassley (R-Iowa) said the SEC had cooperated in the Senate investigation. In a statement, SEC spokesman John Nester said the SEC would “carefully consider the report's findings and recommendations." www.investmentnews.com/apps/pbcs.dll/article?AID=/20070202/FREE/70202015The above report is unique in that it gets into detail about who supported Gary Aguirre. This is a unique trait amongst all the reports on this matter.
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Post by jannikki on Feb 9, 2007 19:36:30 GMT -4
SEC's Cox awaits final congressional report in Pequot (Corrects headline and first two paragraphs to show Cox said he would pay attention to congressional committee's final report. The original headline said the SEC chairman would consider reopening Pequot case.) By Karey Wutkowski WASHINGTON, Feb 9 (Reuters) - The head of the U.S. Securities and Exchange Commission said on Friday he "will pay attention" to the final report of a Senate committee looking at the agency's handling of an insider trading probe involving hedge fund Pequot Capital and John Mack, who is now the chief executive of Morgan Stanley. (MS.N: Quote, Profile , Research) SEC Chairman Christopher Cox, talking to reporters at the agency's annual "SEC Speaks" event, declined to comment about two Republican senators' call for the SEC to reopen the now-closed case. Late last month, Senators Charles Grassley of Iowa and Arlen Specter of Pennsylvania accused the SEC of mishandling the 2005 dismissal of an agency investigator, who alleges he was fired after the Pequot probe got too close to Mack. SEC Enforcement Director Linda Thomsen said at a Dec. 5 hearing that the allegations of Gary Aguirre, the former investigator, were untrue. Thomsen said Aguirre was fired because he was unable to work effectively with other staff or adhere to SEC process. Thomsen told Specter, who chaired the hearing, that Pequot was thoroughly investigated and that the case was closed because the SEC did not find sufficient evidence to bring charges. But Grassley said on the Senate floor that interim findings of a probe by congressional committee staffers "paint a picture of a troubled agency that faces serious questions about public confidence, the integrity of its investigations and its ability to protect all investors." Aguirre has said publicly that the investigation led him to suspect that Mack tipped off Pequot to a 2001 merger deal that allowed the hedge fund to make an illegal $18 million insider-trading profit. In early 2001, Mack was Morgan Stanley president, but left to become chief executive of Credit Suisse First Boston. He was briefly chairman of Pequot before returning to Morgan Stanley. Aguirre has said he wanted to subpoena Mack in the probe, but was stopped by SEC supervisors because of Mack's political clout. © Reuters 2007. All Rights Reserved. today.reuters.com/news/articleinvesting.aspx?type=governmentFilingsNews&storyID=2007-02-09T164559Z_01_N09382212_RTRIDST_0_SEC-PEQUOT-CORRECTION.XML
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