Post by kranker on Jul 14, 2006 18:42:09 GMT -4
UPDATE 2-Ex-SEC lawyer sues agency over Pequot probe files
Fri Jul 14, 2006 6:23 PM ET
(Adds details from court complaint, Royce comment)
By Kevin Drawbaugh
WASHINGTON, July 14 (Reuters) - A former U.S. Securities and Exchange Commission staff attorney on Friday sued the SEC seeking access to records from an insider trading probe that he says was halted for political reasons and cost him his job.
Gary Aguirre filed a Freedom of Information Act (FOIA) lawsuit in federal court seeking access to files from an investigation he once led into hedge fund Pequot Capital Management and other records from his short tenure at the SEC.
Aguirre claims he was fired from the SEC in September 2005 after less than a year on the job when the Pequot probe got too close to John Mack, former head of the hedge fund and now chief executive of investment bank Morgan Stanley <MS.N>.
The former agency investigator claims he wanted to subpoena Mack, but he was stopped by supervisors due to Mack's clout.
The court complaint filed in U.S. District Court for the District of Columbia said the records Aguirre seeks will show that senior SEC officials gave "favored, special and thus unlawful treatment to an individual (Mack), who has powerful political connections, in an SEC investigation."
No SEC charges have been filed against anyone in the matter. The SEC declined to confirm or deny whether it is investigating, holding to its standard policy.
But SEC spokesman John Nester said: "Any suggestion that preferential treatment was sought or given during the course of an investigation is absolutely without merit."
A Morgan Stanley spokesman said the investment bank had no additional comment beyond what it has said before on Aguirre.
After a recent Senate hearing where Aguirre testified, a Morgan Stanley spokeswoman said that no one has provided any evidence that Mack engaged in any wrongdoing.
Connecticut-based Pequot has denied any wrongdoing.
Scott Hodes, a FOIA lawyer in Washington, said he helped Aguirre file the lawsuit. Hodes said it seeks records on Aguirre's career at the SEC, the investigation he led and the SEC's efforts to stop him from discussing the matter publicly.
The lawsuit said congressional committees and the U.S. Office of Special Counsel, a federal agency that protects government whistle-blowers, are looking into Aguirre's case.
The Government Accountability Project, a private group that assists whistle-blowers, is also working with Aguirre. Joanne Royce, general counsel for the group, said it carefully examined "the evidence of the SEC's misconduct in this case."
Royce said in a statement: "Through this lawsuit, we expect to place that evidence and more before the public."
Aguirre, 66, first made his accusations in a May letter to two U.S. senators. A copy of the letter released publicly did not identify Mack by name. But a June 23 New York Times article about the letter did, drawing attention to Aguirre.
A Senate committee five days later heard testimony from Aguirre. At the hearing, he repeatedly referred to "Mr. Mack" when describing the investigation, while also saying that the SEC had urged him not to discuss the Pequot matter publicly.
The former SEC lawyer told lawmakers he suspected Mack, who formerly headed another investment bank, tipped off Pequot to a 2001 merger deal that allowed the hedge fund to make an illegal $18 million profit from inside information.
Aguirre said that, while investigating Pequot, he proposed issuing SEC subpoenas to Mack. He told senators his SEC supervisor "blocked the issuance of subpoenas ... because the suspected tipper had powerful political connections." (Additional reporting by Dan Wilchins in New York)
tinyurl.com/r9by9
Fri Jul 14, 2006 6:23 PM ET
(Adds details from court complaint, Royce comment)
By Kevin Drawbaugh
WASHINGTON, July 14 (Reuters) - A former U.S. Securities and Exchange Commission staff attorney on Friday sued the SEC seeking access to records from an insider trading probe that he says was halted for political reasons and cost him his job.
Gary Aguirre filed a Freedom of Information Act (FOIA) lawsuit in federal court seeking access to files from an investigation he once led into hedge fund Pequot Capital Management and other records from his short tenure at the SEC.
Aguirre claims he was fired from the SEC in September 2005 after less than a year on the job when the Pequot probe got too close to John Mack, former head of the hedge fund and now chief executive of investment bank Morgan Stanley <MS.N>.
The former agency investigator claims he wanted to subpoena Mack, but he was stopped by supervisors due to Mack's clout.
The court complaint filed in U.S. District Court for the District of Columbia said the records Aguirre seeks will show that senior SEC officials gave "favored, special and thus unlawful treatment to an individual (Mack), who has powerful political connections, in an SEC investigation."
No SEC charges have been filed against anyone in the matter. The SEC declined to confirm or deny whether it is investigating, holding to its standard policy.
But SEC spokesman John Nester said: "Any suggestion that preferential treatment was sought or given during the course of an investigation is absolutely without merit."
A Morgan Stanley spokesman said the investment bank had no additional comment beyond what it has said before on Aguirre.
After a recent Senate hearing where Aguirre testified, a Morgan Stanley spokeswoman said that no one has provided any evidence that Mack engaged in any wrongdoing.
Connecticut-based Pequot has denied any wrongdoing.
Scott Hodes, a FOIA lawyer in Washington, said he helped Aguirre file the lawsuit. Hodes said it seeks records on Aguirre's career at the SEC, the investigation he led and the SEC's efforts to stop him from discussing the matter publicly.
The lawsuit said congressional committees and the U.S. Office of Special Counsel, a federal agency that protects government whistle-blowers, are looking into Aguirre's case.
The Government Accountability Project, a private group that assists whistle-blowers, is also working with Aguirre. Joanne Royce, general counsel for the group, said it carefully examined "the evidence of the SEC's misconduct in this case."
Royce said in a statement: "Through this lawsuit, we expect to place that evidence and more before the public."
Aguirre, 66, first made his accusations in a May letter to two U.S. senators. A copy of the letter released publicly did not identify Mack by name. But a June 23 New York Times article about the letter did, drawing attention to Aguirre.
A Senate committee five days later heard testimony from Aguirre. At the hearing, he repeatedly referred to "Mr. Mack" when describing the investigation, while also saying that the SEC had urged him not to discuss the Pequot matter publicly.
The former SEC lawyer told lawmakers he suspected Mack, who formerly headed another investment bank, tipped off Pequot to a 2001 merger deal that allowed the hedge fund to make an illegal $18 million profit from inside information.
Aguirre said that, while investigating Pequot, he proposed issuing SEC subpoenas to Mack. He told senators his SEC supervisor "blocked the issuance of subpoenas ... because the suspected tipper had powerful political connections." (Additional reporting by Dan Wilchins in New York)
tinyurl.com/r9by9