We've been pointing out for a long time that the really (potentially) explosive issue raised by former SEC investigator Gary Aguirre was not the now-officially dismissed suspicions on insider trading by Pequot Capital or illegal tipping by John Mack, but the still largely univestigated charges of favoritism at the SEC. Recall that Aguirre claimed he was fired from the SEC for trying to subpoena John Mack, who was then about to become the top man at Morgan Stanley. Now the mainstream media, for reasons of its own, has enjoyed playing up Mack's connections to the Bush administration but a more relevant fact is probably his status as the head of a major Wall Street bank. This raises the fear that the SEC has been captured by the very industry its supposed to regulate. (By the way, even this might be too optimistic, since the words "been captured" imply that the regulatory agency was not created, owned and operated by the largest investment banks right from the start.)
In today's Wall Street Journal, the Senate's Finance Committee chairman Charles Grassley says that this is precisely the matter on which the committees investigation is focused.
Your Dec. 8 editorial "The Pequot 'Scandal'" leaves the impression that Gary Aguirre and I are the only two people concerned about the way the SEC handled the Pequot investigation. In fact, Mr. Aguirre's concerns have been echoed by both former and current SEC officials, who provided candid testimony to our committees.The focus of the Senate investigation I'm conducting with Sen. Arlen Specter (R., Pa.) isn't John Mack and Pequot; rather, it is whether the SEC retaliated against one of its lawyers and whether it wields an even hand in looking out for investors big and small. Our review is evidence-based, and so far the evidence suggests the Pequot investigation was fraught with problems, Mr. Aguirre's termination is suspect, and the inspector general failed in his duty to conduct a thorough and independent inquiry.
Sen. Chuck Grassley (R., Iowa)
Chairman
Committee on Finance
Washington
An SEC Investigation Fraught With Problems [Wall Street Journal]
Posted by Mark Santos , Dec 13, 2006 12:38PM
Way to go Senator Grassley!!
Along with Senator Specter, Senator Grassley's ability to stay focused on this SEC "fairness" matter has been more than impressive; and I sincerely urge all readers to follow this important issue closely.
IMHO, for years the investment-banking giants have controlled not only Wall Street and its regulators, but also the society-mindset-molding financial media.
But fortunately for private investors, the recent senate hearing on this matter clearly demonstrated that they do not control congress - not yet anyway!
See these Big Boys are accustomed to resolving matters like this in their cozy arbitration settings, you know those all-powerful panels made up of chosen peers; not a forum like a Senate hearing that focuses on gathering real evidence, and asking relevant questions.
Looks perhaps like the Bad Guys may have finally met their match; and for the sake of our nation's all-important equity markets, let's all hope so!
IMHO,
Sparky
Posted by John Carney , Dec 13, 2006 12:42PM
Of course, Grassley isn't controlled by Wall Street. As the Senator from Iowa, he's controlled by Big Agriculture.
Posted by abe shorey , Dec 13, 2006 12:53PM
I assume Sparkles comment is parody. They're all in someone's bag, and Gary Aguirre is a sniveling douche. There are no good guys in DC or on Broad St. Recent Senate hearing on any matter clearly demonstrated that someone needs to take a flamethrower to that filthy place. As for Grassley, ethanol is a fraud, screw him and his tractor driving enablers. I'll take a crack whore over a farmer, or congressman, any day.
Posted by CMKX SHAREHOLDER , Dec 13, 2006 9:02PM
Lucent naked shorted and nortel naked shorted the cover up is in.
CMGI next to be covered up but CMKX is watching you losers!
Posted by naked and shorted , Dec 14, 2006 6:35PM
"The bottom line is he should have been contacted sooner rather than later for his version of (what) had happened," Foster said. He also said that "Gary Aguirre is one of the best investigators that there is."
Foster's comments are in line with testimony last week from Eric Ribelin, an SEC official who works in the office of market surveillance. Ribelin told the Senate Judiciary Committee that Hanson didn't respond to his suggestion that the SEC call Mack for an informal interview instead of issuing subpoenas.
"And then, finally, of course, Gary Aguirre was fired when he was on vacation and I was stunned, I was outraged," Ribelin testified. "And the email that you just referred to was soon after these events."
~By Siobhan Hughes, Dow Jones Newswires, Siobhan.Hughes@ dowjones.com