Senate report faults SEC on hedge fund probe (Reuters)

Source: Reuters

Senate report faults SEC on hedge fund probe
Sat Aug 4, 2007 12:25PM EDT

By Kevin Drawbaugh

WASHINGTON (Reuters) - The Securities and Exchange Commission
mishandled an investigation of suspicious hedge fund trading that
led to the 2005 firing of an SEC attorney, a U.S. Senate report says.

The report from the Senate Finance and Senate Judiciary committees,
released late on Friday, ends a year-long inquiry into the dismissal
of former SEC staffer Gary Aguirre.

Aguirre says he was forced out of the agency after a probe he was
leading got too close to prominent Wall Street banker John Mack. His
claims prompted three Senate hearings and drew heavy press coverage.

The final Senate report criticized SEC management of the investigation
and expressed concerns about whether allegations of improper political
influence had damaged the agency.

-snip-

Read more: http://www.reuters.com/article/politicsNews/idUSN0440750520070804

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Source: New York Times

Report Says S.E.C. Erred on Pequot

By GRETCHEN MORGENSON and WALT BOGDANICH
Published: August 4, 2007

The Securities and Exchange Commission bungled a promising investigation
two years ago into suspicious trading at Pequot Capital Management, a
giant hedge fund, according to the final report released yesterday by
Congressional investigators looking into the matter.

Among the commission’s failings, the report said, were delays in the Pequot
investigation, disclosure of sensitive case information by high-level S.E.C.
officials to lawyers for those under scrutiny, a detrimental narrowing of
its scope after a meeting with a Pequot lawyer, and the appearance of
“undue deference” to a prominent Wall Street executive that resulted in
the postponement of his interview until after the case’s statute of
limitations had expired.

The 108-page report by the Senate Finance and Judiciary committees under
the leadership of Charles E. Grassley, Republican of Iowa, and Arlen Specter,
Republican of Pennsylvania, caps a yearlong investigation into the S.E.C.’s
firing of Gary J. Aguirre, a former staff lawyer, in September 2005.

Mr. Aguirre, who led the commission’s investigation into suspect trading by
Pequot and its founder, Arthur J. Samberg, was fired after he complained
that superiors had thwarted his efforts by barring his interview of John J.
Mack, currently the chief executive of Morgan Stanley and a close friend
of Mr. Samberg.

-snip-

Read more: http://www.nytimes.com/2007/08/04/business/04pequot.html