Wednesday, 4 May 2016
Last updated 27 min ago
Jun 30 2010 | 12:46pm ET
A former Securities and Exchange Commission lawyer who claimed he was fired for pursing a probe into hedge fund Pequot Capital Management has won a $755,000 settlement from the regulator.
Gary Aguirre will receive $649,100 to cover the more than four years of salary he lost since being fired in September 2005, the Merit Systems Protection Board said. He’ll also receive $105,900 to pay his legal bills arising from the case.
Aguirre alleged that he was fired for pushing hard to interview former Morgan Stanley CEO John Mack, who served as chairman of Pequot prior to taking the reins at the investment bank in 2005. Aguirre said he suspected that Mack offered the hedge fund insider-information about Morgan Stanley before becoming the bank’s CEO.
The SEC countered that it fired Aguirre because he didn’t “work effectively with other staff members,” despite his receiving a performance-based raise just two weeks before his termination.
A Senate investigation in 2007 sided with Aguirre, and the SEC’s own inspector-general blasted the agency’s handling both of his firing and off its Pequot probe, which it closed in 2006 due to “insufficient evidence.” The SEC reopened its probe last year, and last month struck a $28 million settlement agreement with the hedge fund and founder Arthur Samberg, who decided to close the hedge fund after the investigation was revived.
“I wanted to demonstrate one way or another that the SEC had made a huge mistake in closing down this investigation,” Aguirre told Bloomberg News. “Getting them to come clean, that was the victory.”
Sen. Arlen Specter (D-Pa.), one of the two senators who led the investigation into Aguirre’s claims, added, “the settlement with Mr. Aguirre shows that the SEC is finally acknowledging its mistake.”
Still, the SEC did not admit any wrongdoing in the settlement, and Aguirre has agreed to never seek employment with the agency again.