Post by jannikki on Jun 28, 2006 22:52:11 GMT -4
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gluggo
Ace of Diamonds
member is offline
Joined: Sept 2005
Posts: 1,794
SEC rules muzzle whistleblower
« Thread Started on Today at 10:21pm »
--------------------------------------------------------------------------------
Looks like the lawmakers bullet missed the SEC today with Aguirre's testimony!
Deepthroat was silenced today.
www.marketwatch.com/News/Story/8RcD9n67MBQpxQMWK3ZPM3D?siteid=bigcharts&dist=morenews
CAPITOL REPORT
SEC rules muzzle whistleblower
Analysis: Former investigator can't tell what he's learned
By Robert Schroeder, MarketWatch
Last Update: 6:50 PM ET Jun 28, 2006
WASHINGTON (MarketWatch) -- Gary Aguirre could only go so far on Wednesday. But the questions will keep coming.
Aguirre, a former SEC investigator allegedly fired for getting too close to the politically connected CEO of a big Wall Street firm in the course of an insider-trading probe, was happy to recount the story of his termination to the Senate Judiciary Committee. See full story on the hearing.
But when it came to details of that investigation? Nothing doing. Aguirre ran into a problem: The SEC's own rules, which prohibit the public disclosure of information obtained in an official investigation.
Aguirre told the Senate that the SEC had warned him not to say anything that was not already in the public record.
Senate committees are already investigating Aguirre's dismissal from the SEC and his charge that his firing was politically motivated. On Wednesday, the drumbeat for answers from the agency got louder.
Lawmakers wanted to know why the former SEC investigator was fired for wanting to question Morgan Stanley CEO John Mack while investigating hedge fund Pequot Capital Management.
Aguirre agreed to limit his testimony to publicly available information. But getting an abbreviated briefing from Aguirre drew outrage in the Senate Judiciary Committee Wednesday, as Chairman Arlen Specter, R-Pa., raised the possibility of a closed-door meeting with the dismissed lawyer.
"We need to know the facts," Specter said.
It may be a long time before all the facts in this case are known.
Here's what we do know:
Aguirre maintains he was dismissed as an SEC attorney after his investigation into Pequot got too close to Mack, CEO of Morgan Stanley. Mack worked for Credit Suisse First Boston at the time of Aguirre's inquiry. Morgan Stanley says it has no reason to believe the SEC has any interest in Mack in connection with the matter.
Lawmakers quickly developed an interest in Aguirre's story of intrigue and betrayal after the New York Times reported it Friday. Specter quickly invited him to testify on Wednesday at a long-planned hearing about hedge funds.
But the SEC warned him Monday that it expected him to comply with "his ethical obligations as an attorney" and his responsibilities under the SEC's non-disclosure rules, according to a letter from SEC attorney Richard Humes to Aguirre's attorney, George Chuzi.
One former SEC staffer said it's normal for the agency to enforce a code of silence about investigations.
"To the extent that there's non-public information about the ongoing investigation into the activities of Pequot, the SEC can muzzle" Aguirre or other current or former employees, said Darren Sherman, now CEO of Regulatory Advisory Services. Sherman formerly worked in SEC office of compliance, inspections and examinations.
That's unlikely to satisfy Specter or other members.
"This is particularly troubling when your testimony may question the propriety of the SEC itself," Specter told Aguirre Wednesday.
It's common for congressional committees to hold closed-door briefings about classified national security matters. But not about SEC-related matters.
Aguirre's, however, is an uncommon situation. It's rare -- if not unheard of -- for an ex-SEC employee to appear before Congress and point fingers at the agency, Sherman noted.
A spokeswoman for Specter said there are currently no plans for a closed-door meeting with Aguirre.
Humes said at least two rules require that SEC investigations stay under wraps. One rule makes information or documents obtained by the agency in the course of an investigation or examination confidential. Another rule says that documents from an investigation are deemed non-public unless stated otherwise.
SEC spokesman John Nester said the agency didn't explicitly tell Aguirre to limit his testimony Wednesday. He also declined to say whether it would be illegal if Aguirre had revealed non-public information.
"We don't prejudge legalities or illegalities of things," he said.
Legal or illegal, it's all but certain Aguirre will be asked to talk again.
Robert Schroeder is a reporter for MarketWatch in Washington.
gluggo
Ace of Diamonds
member is offline
Joined: Sept 2005
Posts: 1,794
SEC rules muzzle whistleblower
« Thread Started on Today at 10:21pm »
--------------------------------------------------------------------------------
Looks like the lawmakers bullet missed the SEC today with Aguirre's testimony!
Deepthroat was silenced today.
www.marketwatch.com/News/Story/8RcD9n67MBQpxQMWK3ZPM3D?siteid=bigcharts&dist=morenews
CAPITOL REPORT
SEC rules muzzle whistleblower
Analysis: Former investigator can't tell what he's learned
By Robert Schroeder, MarketWatch
Last Update: 6:50 PM ET Jun 28, 2006
WASHINGTON (MarketWatch) -- Gary Aguirre could only go so far on Wednesday. But the questions will keep coming.
Aguirre, a former SEC investigator allegedly fired for getting too close to the politically connected CEO of a big Wall Street firm in the course of an insider-trading probe, was happy to recount the story of his termination to the Senate Judiciary Committee. See full story on the hearing.
But when it came to details of that investigation? Nothing doing. Aguirre ran into a problem: The SEC's own rules, which prohibit the public disclosure of information obtained in an official investigation.
Aguirre told the Senate that the SEC had warned him not to say anything that was not already in the public record.
Senate committees are already investigating Aguirre's dismissal from the SEC and his charge that his firing was politically motivated. On Wednesday, the drumbeat for answers from the agency got louder.
Lawmakers wanted to know why the former SEC investigator was fired for wanting to question Morgan Stanley CEO John Mack while investigating hedge fund Pequot Capital Management.
Aguirre agreed to limit his testimony to publicly available information. But getting an abbreviated briefing from Aguirre drew outrage in the Senate Judiciary Committee Wednesday, as Chairman Arlen Specter, R-Pa., raised the possibility of a closed-door meeting with the dismissed lawyer.
"We need to know the facts," Specter said.
It may be a long time before all the facts in this case are known.
Here's what we do know:
Aguirre maintains he was dismissed as an SEC attorney after his investigation into Pequot got too close to Mack, CEO of Morgan Stanley. Mack worked for Credit Suisse First Boston at the time of Aguirre's inquiry. Morgan Stanley says it has no reason to believe the SEC has any interest in Mack in connection with the matter.
Lawmakers quickly developed an interest in Aguirre's story of intrigue and betrayal after the New York Times reported it Friday. Specter quickly invited him to testify on Wednesday at a long-planned hearing about hedge funds.
But the SEC warned him Monday that it expected him to comply with "his ethical obligations as an attorney" and his responsibilities under the SEC's non-disclosure rules, according to a letter from SEC attorney Richard Humes to Aguirre's attorney, George Chuzi.
One former SEC staffer said it's normal for the agency to enforce a code of silence about investigations.
"To the extent that there's non-public information about the ongoing investigation into the activities of Pequot, the SEC can muzzle" Aguirre or other current or former employees, said Darren Sherman, now CEO of Regulatory Advisory Services. Sherman formerly worked in SEC office of compliance, inspections and examinations.
That's unlikely to satisfy Specter or other members.
"This is particularly troubling when your testimony may question the propriety of the SEC itself," Specter told Aguirre Wednesday.
It's common for congressional committees to hold closed-door briefings about classified national security matters. But not about SEC-related matters.
Aguirre's, however, is an uncommon situation. It's rare -- if not unheard of -- for an ex-SEC employee to appear before Congress and point fingers at the agency, Sherman noted.
A spokeswoman for Specter said there are currently no plans for a closed-door meeting with Aguirre.
Humes said at least two rules require that SEC investigations stay under wraps. One rule makes information or documents obtained by the agency in the course of an investigation or examination confidential. Another rule says that documents from an investigation are deemed non-public unless stated otherwise.
SEC spokesman John Nester said the agency didn't explicitly tell Aguirre to limit his testimony Wednesday. He also declined to say whether it would be illegal if Aguirre had revealed non-public information.
"We don't prejudge legalities or illegalities of things," he said.
Legal or illegal, it's all but certain Aguirre will be asked to talk again.
Robert Schroeder is a reporter for MarketWatch in Washington.