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 of 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 Aguirre makes it clear that this was the whole point of his testimony to the Senate.
My allegations to the Senate have focused only on the SEC. I have alleged: (1) senior SEC officials gave Mr. Mack favored treatment; (2) those officials fired me for questioning that favored treatment; and (3) the SEC's inspector general whitewashed the whole affair.
My Charges Against SEC Are Justified [Wall Street Journal]