http://www.finance.senate.gov/sitepages/leg/LEG 2007/36960.pdf you don't have to read the whole thing. It's a step by step account that an idiot would conclude Pequot and Mack needed to be investigated. Sickening. Instead: Go to page 104 and read the conclusion. Damning. They are a tool of the Street, and complicit in the disaster unfolding as I write this.
This story was a headline summer 2006. Then it very mysteriously stopped being reported, as if it it was such a ridiculous notion that such impropriety could have occured with the men identified. It smelled fishy to me at the time, like some very powerful people decided to shut up some reporters to keep the truth from coming to light.
Keep readin', Dude. It 's not an isolated incident. The guy who writes "Investigate the SEC"... they turned him upside down. He's clean. But they let Mack go, and in the report, they infer this was not isolated. The staffers, the people who do the work, are afraid of their own IG. The IG of the SEC is there to keep the enforcement attorneys in line. Let's take it one step farther. Does anyone doubt that the shorts can sic the SEC on a company at their will? Does TASR ring a bell? Overstock? How many others? Anthony Elgindy had the power to call the SEC into a room, and put them on a company. What happens to a stock when the SEC steps in? Shameful. Here, make the sound of a bomb falling.
You would think the business "journalists" would be crawling on a story like this, which has Pulitzer Prize written all over it. I mean come on, Masters of the Universe are so powerful they can spike an SEC probe into obvious insider trading and sweetheart deals. What gives? I mean, other than hedge fund billionaires and investment bankers to pols of both parties. And the weenies at the WSJ have the audacity to complain that Murdoch might infringe on their integrity. What integrity? Looks to me like a new broom is badly needed there.
http://www.forbes.com/2007/08/07/stachnik-sec-pequot-biz-wall-cx_lm_0807sec_print.html Regulation SEC Official Retires As Report Blasts Performance Liz Moyer, 08.07.07, 4:03 PM ET A central character in the U.S. Securities and Exchange Commission's investigation in to Pequot Capital quit his job Friday, the day the Senate issued a scathing report about his role in the investigation. Walter J. Stachnik, who has been inspector general of the SEC since the job was created in 1989, retired Friday, the day the Senate said his role in the investigation of allegations that Pequot Capital engaged in insider trading and other suspicious trading was "flawed from the beginning and hindered by missteps during the entire process." The SEC's official line is that Stachnik's retirement was planned, but no interim or permanent placement has been named, and the SEC hasn't even gotten around to announcing his departure. Stachnik could not be reached for comment. The inspector general of the SEC is supposed to act as an impartial arbiter of the agency's conduct, auditing commission operations, programs, activities, functions and organizations, and investigating allegations of staff misconduct, according to the SEC's Web site. But the 108-page Senate report, the product of a joint investigation by the Finance and Judiciary committees, said the inspector general had "failed in its mission." The report added that, based on interviews of current and former SEC staff, the inspector general is "not well respected" and perceived as "a tool of management, used for retaliatory investigations against disfavored staff." "The SEC needs to take immediate action to restore the independence, competence and confidence" in the Office of the Inspector General, the report says. The Senate investigation into how the SEC handled allegations of insider trading at Pequot Capital began last year, after a former staff investigator at the SEC, Gary Aguirre, said he had been fired for raising questions about the SEC's treatment of him in the course of his work. The report paints a picture of an agency mired in political favoritism, one that delayed the Pequot investigation, disclosed information about the case to lawyers for the people being investigated, and displayed deference to a well-known Wall Street executive. Aguirre led the SEC's investigation into the suspicious trading by Pequot, including allegations of insider trading. Pequot is an influential hedge fund founded by Arthur Samberg, a close friend of Morgan Stanley Chief Executive John Mack, the Wall Street executive for whom the SEC allegedly played favorites. Aguirre has contended he was fired in the summer of 2005, at the peak of his investigation, after complaining to higher-ups at the agency that he was being stonewalled by the SEC in proceeding with the case, namely in his desire to interview Mack. The SEC closed the Pequot case last fall without taking action. An SEC spokesman said Tuesday he was not aware of any connection between the timing of Stachnik's retirement and the release of the report.
This guy was a putz. Spector pointed at him in the hearing and asked why he was subpoenaing Aguirre for what he gave Judiciary. Spector said it would ruin the whistleblower program. Aguirre had already given them 200 pages of documents. The IG was then seen whispering to a DOJ attorney who was seated behind him, and , ......well. You now know the rest. Fish rot from the head. Next!
How did they take the guy who writes "Investigate the SEC", and turn him upside down? What were the charges made against him?
they can go into your accounts and look for flipping, insider trading, etc. They couldnt' find anything, cuz there was nothing there. He buys and holds..
Aguirre Discusses Byrne, Naked Shorting & Bigger Pictures By Christopher Faille, Senior Financial Correspondent Tuesday, August 14, 2007 SAN DIEGO (HedgeWorld.com)âGary Aguirre, at the center of a regulatory storm that has now swirled about Washington for two years, said he looks for the big picture from his California home. In an exclusive interview with HedgeWorld on Tuesday [Aug. 14], Mr. Aguirreâwho was fired from the Securities and Exchange Commission in 2005, and who has since alleged that his firing was the result of his persistence in investigating suspect trades by hedge fund Pequot Capital Previous HedgeWorld Storyâboth embraced and distanced himself from the anti-naked shorting crusade of Overstock.com Chief Executive Patrick Byrne and others. There are three categories of risk with hedge funds, Mr. Aguirre said. The first category is the fact that hedge funds sometimes cheat their investors. This is the least serious of the three categories, since their investors generally are capable of looking after themselves, and Mr. Aguirre said he considers it unfortunate that this is the one threat on which the SEC spends the most time. The second risk category is that hedge funds may victimize other market participants, many of whom are unaware of what is going on. "There are at least a half a dozen different ways of doing this," he said Tuesday. Naked shorting is one of those ways. Insider trading, on the long side, the short side or both, is another. Market timing through compliant mutual funds is yet another. He said that he isn't opposed to short selling as a strategy. "Short selling in general is obviously a market check to excesses on the upside," he said. "But naked shorting is different, because it goes beyond what is available at the investment banks, and there is no limit to it." He said that he hasn't been in communication with Mr. Byrne, who cited him favorably in a manifesto posted on an Overstock.com Inc. bulletin board last week Previous HedgeWorld Story. The two men have developed their views separately, and so it's unsurprising that they have different emphases, and some area of overlap. "I agree with Mr. Byrne," Mr. Aguirre said, "that the SEC has failed to protect the capital markets from naked shorting. From my perspective, however, naked shorting is just one of the tactics, and perhaps not the most significant, that hedge funds have used to create a tilted playing field. At some point, the erosion of investor confidence may reach a point that we experience a full blown market collapse." Mr. Aguirre said, though, that in its level of seriousness, this sort of thingâthe victimization of third parties by hedge fund managers for the benefit of their investorsâis still not a systemic risk. The third categoryâand the gravest of the three risk categories Mr. Aguirre citedâis the systemic risk that hedge funds pose to the capital markets as such from their unlimited use of leverage. The combination of those second and third categories, he said, "delivered the 1929 crash and could do so again." Mr. Aguirre said he is concerned that regulators have fallen into a false sense of security under the influence of the idea that private sector counterparties are effectively constraining hedge funds. "I've done a little research into this idea of counterparty constraint and I don't think it has any substance." It didn't work before, not in 1929, when unregulated pools of money then called syndicates or pools helped create the conditions for crash and depression, and not in 1998, when the counterparties of Long-Term Capital Management required the good offices of the Federal Reserve. And it isn't working now, Mr. Aguirre said. There is such a "tremendous cash flow from hedge funds to investment banks" in the latter's capacity as prime brokers, Mr. Aguirre said, that it is unrealistic to expect the investment banks to act as a check upon hedge funds. Furthermore, there's been a good deal of blurring of the lines between investment banks and hedge funds. "Until the last couple of months, we've seen a near hysteria in investment banks that you've got to own your own hedge fund," Mr. Aguirre said. After the LTCM incident, Mr. Aguirre said, the President's Working Group on Financial Markets recommended greater transparency for hedge funds. "I don't know whether that would have been enough," Mr. Aguirre said, "but it would have been something." Unfortunately, from his perspective, hedge funds remain opaque, and regulators continue to rely too much upon counterparties to mitigate the risks posed by hedge funds. CFaille@HedgeWorld.com