Wednesday, August 12, 2009

Art Samberg receive Wells notice.

http://www.forbes.com/2009/08/12/pequot-samberg-sec-business-wall-street-microsoft.html

Posted by Peter York, at 6:49 PM

Friday, January 2, 2009

Recent Quote on the SEC

The system maintains itself, because those that stay know their turn will come if they play the game. They see a director or associate director move onto a $2 million job with a Wall Street law firm. Then, the departed employee calls back to his former colleagues and says, “you know I really don’t think there is much of a case against so-and-so, I’d like for you to take a look at it.” And the case goes away; the system goes on in perpetuity … [There's a] culture of ‘don’t rock the boat,’ the industry does not want ‘boy scouts,’ and if you can be effective with the SEC through your contacts, that is a very valuable asset you can bring to the table.

Posted by Perry Rod, at 3:37 AM

Wednesday, November 12, 2008

Good Article About Aguirre

IN 2005, AT THE AGE OF 65—when most men are slipping into the placid stasis of retirement—Gary Aguirre was getting fired by the federal government. He raised a stink, and Congress got involved. Hearings were held, and two Republican senators formally chastised the highest levels of a top government agency over the incident. But don’t let theatrics fool you. Aguirre is a soft-spoken man with a lawyer’s deliberative sense and, above all, a common-sense notion of right and wrong—not the political maverick whose image might be conjured up by the family name...

FULL ARTICLE

 

Posted by Peter York, at 8:50 PM

Wednesday, November 12, 2008

S.E.C. Lawyer Claims Firing Over Fund Inquiry

From June '06 New York Times

WASHINGTON (AP) -- A former government attorney told Congress on Wednesday that he was fired for investigating a hedge fund too aggressively and said law enforcement is failing in its duty to protect investors in the growing hedge fund industry.

Gary Aguirre, who led the Securities and Exchange Commission's investigation of a major hedge fund for possible insider trading, was fired from his job by the SEC last summer. Aguirre says he was blocked by superiors when he tried to question a prominent Wall Street executive in the probe of Pequot Capital Management Inc.

Aguirre, who spoke at a hearing of the Senate Judiciary Committee, also said the SEC had told him he would risk violating the law by testifying on the matter because details of a pending investigation could be made public.

"Fixing the SEC so it can protect investors and capital markets from hedge fund abuse will not be an easy task," Aguirre said in testimony submitted for the hearing. "Powerful interests want the SEC to stay just the way it is or, better yet, to become even weaker."

Powerful Wall Street investment banks "stopped the hedge fund investigation I was assigned to conduct," Aguirre charged. "They cost me my job."

Aguirre said the SEC and the Justice Department have failed to adequately prosecute abuses by hedge funds. The Justice Department "merely shadows the SEC's meager scrutiny of hedge funds," he said.

SEC officials have denied Aguirre's allegation of political influence, and say it is against their policy to discuss personnel matters.

Attorney General Richard Blumenthal of Connecticut urged the senators to regulate hedge funds, the high-risk investment pools that traditionally served the very wealthy but are increasingly luring ordinary investors.

A federal appeals court decision Friday that overturned the SEC's new regulation of hedge funds has left them in "a regulatory black hole," Blumenthal testified at Wednesday's hearing.

"Federal action is profoundly preferable ... but the states must fill the void if Congress fails to act," he said.

Hedge funds have become more popular with small investors in recent years. Today thousands of hedge funds in the United States command trillions of dollars in assets and leave a wide footprint in the financial markets. They are believed to account for as much as 20 percent of all U.S. stock trading.

At the same time, SEC regulators have seen an upswing in fraud among hedge funds, and the agency has been bringing more enforcement cases against them -- charging fund managers with defrauding investors of a total exceeding $1 billion in the last five years.

In addition to Aguirre's allegations, the Judiciary Committee also is examining the case of Demetrios Anifantis, a former employee of a research firm, who has accused the firm of colluding with its hedge fund clients to issue biased research reports on companies. Anifantis was fired from his job at Camelback Research Alliance, which now is called Gradient Analytics Inc.

Aguirre says his firing by the SEC last September was related to his efforts to take testimony in the Pequot probe from John Mack, the chief executive of investment house Morgan Stanley (NASDAQ:MNDX) Inc. Mack, a longtime investor in Pequot and a friend of its founder, served briefly last year as the hedge fund's chairman.

No charges have been brought against Pequot, a hedge fund with some $6.5 billion in assets that is overseen by Arthur Samberg, a well-known money manager and philanthropist. Pequot has denied that there was any improper activity by the fund. The SEC investigation of the fund and Aguirre's accusations were first reported Friday by The New York Times.

SEC officials have denied Aguirre's allegation that Mack was spared from questioning because of his political ties as a major fundraiser for President Bush's campaigns. No one tried to exert improper influence, they have said.

Anifantis was a client relationship manager for Gradient's predecessor firm, Camelback Research Alliance. He was fired in November 2004. A spokeswoman for Gradient, Karen Hinton, said Tuesday that the firm has raised "serious questions" with the Judiciary Committee staff "about the integrity of Demetrios Anifantis's testimony."

Lawyers for online retailer Overstock.com Inc. (NASDAQ:OSTK) -- which has sued Gradient and hedge fund Rocker Partners alleging stock manipulation -- appeared to have played a role in writing Anifantis's testimony, Hinton said.

Overstock alleges in the suit that Gradient issued negative reports on Overstock in exchange for payments from Rocker, which sought to profit from a drop in the retailer's stock price. Gradient and Rocker have denied the allegations, which the SEC has been investigating.

 

Posted by Peter York, at 8:48 PM