News that hedge fund Pequot Capital Management Inc. would shut down because of a government probe is likely to resurrect the controversy that led to the firing of SEC lawyer Gary Aguirre.
Aguirre had been investigating allegations of insider trading at Pequot, which led him to request an interview with John Mack, who is now the head of Wall Street investment bank Morgan Stanley (NYSE:MS).
Aguirre was investigating allegation that in 2001 Mack, then an executive at Credit Suisse Group, had informed Pequot about a pending deal between General Electric Co. (NYSE:GE) and Heller Financial. The probe was abruptly halted in 2005, and Aguirre was fired. Aguirre contended that he was dismissed for pursuing the powerful Wall Street figures.
The SEC then tried to cover up its reasons for firing him, he claimed. A recent investigation by David Kotz, the SEC's inspector general, found that Aguirre's version of events was spot on and the SEC faulted.
The issue seemed to disappear, until Samberg's letter to investors announcing he was shuttering the $3 billion fund because "public disclosures about the continuing investigation have cast a cloud over the firm and have become a source of personal distraction."
The case Pequot is currently being investigated for was closed in 2006 and focused on a former Microsoft Corp. (NYSE:MSFT) employee, David Zilkha, who briefly joined Pequot in April 2001 and left in November of that year. The case was reopened after new information came to light during Zilkha's divorce proceedings in Connecticut. - Donna Block
See earlier story about Pequot from Dealscape
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At the risk of sounding repetitive, in Sparky's humble but well-informed opinion, Morgan Stanley's infamous John J. Mack is a prime example of precisely what is wrong Wall Street.
And anyone who takes the time to research this Mack-Pequot Capital-Samberg-Gary Aguirre matter, including all the congressional testimony; would have a real hard not reaching the same conclusion.
The bottom line is simple: Mack was guilty as sin - he clearly tipped off Samberg about the Heller Financial-GE merger. Mack was in a position of knowledge to do so, he and Samberg spoke, Samberg acted on the insider info he wrongly obtained, and Pequot booked a gain of somewhere around $ 19 million.
Aguirre was dead right in his suspicions, he was doing exactly what the SEC is supposed to do - ferret out evil and dishonest garbage - but for doing this he was terminated.
Why? Because the SEC was, and still is, managed by a group of elitist dirtbags who all have their sights set on high-paying jobs within the filthy industry that they supposedly regulate.
And simply because Mack was represented by a lawyer with "juice," one who had obvious connections with SEC management scum; he managed to get away Scott free with a crime that should have literally ended his evil career and sent his self-serving ass to jail; and this despite “congressional hearings.”
What a repulsive and revolting state of affairs!
IMHO,
Sparky