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Post by ginger on Jul 10, 2006 16:19:21 GMT -4
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Post by seagull on Jul 10, 2006 19:05:34 GMT -4
Thanks Ginger. I'll bet the SEC hasn't commented on the testimony.
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Post by kranker on Jul 10, 2006 19:55:01 GMT -4
July 9, 2006 "The Truth Is Out" "The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation." www.sec.gov/about/whatwedo.shtmlOn June 28th, history was made. Gary Aguirre testified before the Senate Judiciary Committee and singlehandedly destroyed any notion that the Securities and Exchange Commission intends to fulfill its mission to protect investors. The truth is out and it bellows loudly; the SEC serves only one master, the financial industry. Aguirre is a former investigator for the SEC and publicly revealed how senior SEC officials gave in to political pressures to stop his investigation of suspected insider trading by a prominent hedge fund. Aguirre's efforts abruptly ended when he attempted to take the testimony of John Mack, an influential Wall St. bigwig who now runs Morgan Stanley. Aguirre suspected Mack had leaked nonpublic information to Pequot Capital Management, a $7 billion hedge fund run by Art Samberg, in advance of a major corporate takeover. Mack and Samberg have known each other for years. But the Senate and the American public have now heard how Aguirre saved email messages documenting his conversations with his SEC superiors who first praised his investigation and then suddenly demanded he end the investigation. Incredibly, Aguirre received a glowing report on his job performance, was awarded a two-step merit pay raise but was then fired while on vacation only days later! Media coverage of whistle blower Aguirre's testimony has been scant and woefully inadequate. Why are commentators avoiding the subject? Either Aguirre is telling the truth or he is not. If he is telling the truth, then the SEC's $1 billion budget has become a waste of taxpayer funds and the agency should be abolished as quickly as possible and replaced with a committee of ethically minded individuals who will protect U.S., investors without any regard whatsoever to political pressures from within the financial industry. An SEC that complies with political pressures cannot possibly fulfill its mission. In our view, this is sensational stuff. Perhaps the smoking gun is still missing, but if Aguirre's testimony is true (and we believe it is), then the evidence is still under wraps and will soon be reviewed by the Senate. The chairman of the Judiciary Committee, Arlen Specter, Republican of Pennsylvania, said he would reserve judgment of Aguirre's credibility until he had seen the content of the email messages, commenting, "Nothing like a contemporaneous document to corroborate testimony." Maybe we're paranoid, but Aguirre's testimony is stunning and his experience is a scary reminder that the public stands little or no chance against the big wheels of industry. The timeline presented by Aguirre bears brute witness to how things really work. Newspapers reported that Mack was being considered to run Morgan Stanley on June 23, 2005. That day, Aguirre received a call from a Morgan Stanley compliance officer and was told Mack was off limits because he had "very powerful political connections." Shortly thereafter, Aguirre's superiors ended his investigation. Incidentally, the Judiciary Committee also heard from one witness who described how hedge funds have manipulated the market by colluding with securities analysts to drive down the stock prices of certain companies. Those who have read our continuing series of articles on the subject, may recognize the complaints against Gradient Analytics, now the defendant in a lawsuit brought by Overstock.com. Our series will resume at some point. And Aguirre's testimony reinforces our belief that things are going to get very dicey for the financial industry. Our page three May 22nd call to avoid Brokerage (and Bank) stocks is looking better every day. Meanwhile, the SEC has declined to comment on Aguirre's testimony. Pequot has denied any wrongdoing but some government officials claim the investigation is continuing. Don't hold your breath.…
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