Senator Wants To Know About SEC Response To SAC Allegations

May 25 2011 | 2:01am ET

A day after SAC Capital Advisors disclosed that it had met with congressional investigators looking into possible insider-trading at the firm, the man spearheading that investigation turned the screws once again.

Sen. Charles Grassley (R-Iowa), the ranking Republican on the Senate Judiciary Committee, asked Securities and Exchange Commission Chairman Mary Schapiro to explain her agency's response to referrals about suspicious trading at SAC from the Financial Industry Regulatory Agency. Grassley himself is investigating 20 such referrals made between 2003 and last year.

Grassley asked Schapiro to detail how the SEC handled the referrals and whether a Wells notice, warning a person or firm about impending SEC civil action, was ever drafted for SAC based on any of the referrals. SAC did receive a Wells notice in 2003, but was never charged.

Grassley last month received the referrals from FINRA.

Grassley in recent years has spent much of time pursuing the SEC and its failings, most notably in a case involving Pequot Capital Management. With Grassley and former Sen. Arlen Specter pursuing the agency's handling of an insider-trading probe into the firm, the SEC eventually reopened the case, leading Pequot founder Art Samberg to shutter the firm.

Congressional investigators are also reportedly looking into derivatives trades made by SAC, which has pledged its cooperation.

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