Possible Cover-up in Hedge Fund Case
Two lawmakers expressed concern over how market regulators handled an insider trading probe involving the hedge fund Pequot Capital and John Mack, the CEO of Morgan Stanley. Pennsylvania senator Arlen Specter, chairman of the Senate Judiciary Committee, said that "at best it looks like extraordinarily lax enforcement by the Securities and Exchange Commission ... At worst, it has the overtone of a possible cover-up... "We are not finished with this. There are people under oath with directly contradictory testimony. It's very, very troubling."
Senator: 'Possible cover-up' in hedge fund case
Former Securities and Exchange Commission attorney Gary Aguirre said that he suspects Mack gave Pequot information about a 2001 merger. At the time, Mack was working at a different investment bank and was a former leader of Pequot. Senator Charles Grassley, from Iowa, said that the case "raises serious questions for me about whether 'captains of industry' get the same treatment as regular investors or whether they get treated with kid gloves."
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