SEC Won't Explain SAC Actions

Jun 13 2011 | 12:31pm ET

The Securities and Exchange Commission of Friday refused to disclose how it dealt with referrals about suspicious trading at SAC Capital Advisors, prompting a furious response from the U.S. senator who asked for its explanation.

"We generally do not comment on the status of investigations or related referrals, and, in turn, are not providing information concerning the specific FINRA referrals you identified," Robert Khuzami, the SEC's enforcement director, wrote to Sen. Charles Grassley (R-Iowa). That did not make Grassley, the senior Republican on the Senate Judiciary Committee who gave the SEC more time to respond to his request just days earlier, particularly happy.

"This isn’t what I asked for, and it's not an acceptable response," Grassley said. "I'm looking for the SEC to explain how it handled specific referrals. Did the agency review them and find no credible evidence of wrongdoing? Or are they sitting in a drawer because the agency ignored them?"

Grassley asked about 20 referrals about suspicious trading at SAC. The senator has stressed his focus is the SEC, a frequent target of Grassley's, and not the hedge fund, which has said it is cooperating with the probe.

"My staff continues to analyze the referrals involving SAC Capital, and I'll continue to ask for answers from the SEC," Grassley added.

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