Friday, 25 July 2014
Last updated 31 min ago
Nov 30 2006 | 10:48am ET
Senate Financial Committee Chairman Charles Grassley (R-Iowa) said yesterday that at least some of the accusations leveled by a former Securities and Exchange Commission lawyer have been backed up by his investigation.
Grassley, in an interview with the Associated Press, said, “we’re expecting early next year to have all of this wrapped up” and that evidenced turned up so far in the panel’s probe is generally “supportive” of Gary Aguirre’s claims that the SEC played politics with an investigation into hedge fund Pequot Capital Management. A report from the Finance Committee is due as early as February.
Aguirre, who served as an enforcement attorney at the SEC, claims the commission fired him when his probe got too close to John Mack, the former Pequot chairman who now heads Morgan Stanley. Aguirre suspected that Mack may have passed the confidential tip that was the center of the insider-trading probe on to Pequot chief Arthur Samberg, but that his supervisors—after initially supporting his work—would not allow Aguirre to issue subpoenas related to Mack, one allegedly saying that Mack’s political ties would make the subpoenas untenable.
The SEC told both Mack and Pequot in October that they were off the hook in the investigation.
Grassley admitted he is concerned that the Senate’s new Democratic power brokers may scuttle the results of the investigation.
“The only caveat I’d put on what I’ve said is that hedge funds are known to be big contributors to the Democratic Party, and I hope that doesn’t have an influence on their leadership not to do the traditional oversight that Congress ought to be doing, particularly since Democratic campaign leaders were chastising Republicans in Congress for not doing enough oversight.”
Based on comments from incoming Democratic committee chairmen, Grassley’s fears appear justified. Sen. Patrick Leahy (D-Vt.), who will lead the Judiciary Committee, has said hedge funds are the province of the Banking Committee. Current Judiciary Committee Chairman Arlen Specter (R-Pa.) is running an investigation of his own into insider-trading enforcement, and has railed against hedge funds in the past, notably, calling for jail time for hedge fund managers and others convicted of insider trading. In addition, Sen. Chris Dodd (D-Conn.), who will head the Banking Committee next year, said he would not press forward with the investigation, though he claims jurisdiction over hedge funds for his committee.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…