The SEC has given itself a clean bill of health in the handling of the Pequot Capital hedge fund investigation. The SEC's inspector general and Senate investigators reached the opposite conclusion in their independent probe of the matter.

SEC inspector general pointedly recommended disciplinary action against SEC enforcement chief Linda Thomsen as well as Mark Kreitman assistant enforcement director and Robert Hanson the supervisor of whistleblowing SEC lawyer, Gary Aguirre.

Given the contradictory conclusion, inspector Kotz and the Senator Charles Grassley who had orignially requested the Senate investigation of the matter both balked at the outcome of the SEC's administrative proceeding.

So what was Gary Aguirre blowing the whistle on in the first place? In a nutshell:

Aguirre was the lead attorney in an investigation of suspicious trades at hedge fund Pequot Capital. In pursuit of the investigation Aguirre sought to interview John Mack, chief executive of Morgan Stanley and longtime friend of Arthur Samberg, founder of Pequot.

According to Aguirre, his SEC higher-ups declared hands-off on Mack. When Aguirre pushed the point, he claims he was fired. His subsequent whistleblowing resulting in congressional hearings, which have in turn produced several reports highly critical of the SEC's conduct in the matter.

For a full recap of our Pequot coverage click here.

-- MDT

Labels: Gary Aguirre, John Mack, Pequot Capital