CNN Money – Two senior lawmakers Tuesday questioned how market regulators handled an insider trading probe involving hedge fund Pequot Capital and John Mack, CEO of Wall Street investment houseMorgan Stanley.
Pennsylvania Republican Sen. Arlen Specter, chairman of the Senate Judiciary Committee, said he was disturbed by the Securities and Exchange Commission’s management of the matter.
“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,” Specter said at a hearing by his committee that looked into the Pequot investigation.
At the close of the hearing, where officials involved in the probe testified, Specter said, “We are not finished with this. There are people under oath with directly contradictory testimony. It’s very, very troubling.”
The Pequot affair emerged earlier this year when former SEC attorney Gary Aguirre alleged he was fired and the probe, which he had led, was halted after it got too close to Mack.
