May 27,2010

Grassley Says SEC Leaders Should Be Held Accountable for Firing Whistleblower Vindicated in Pequot Case Announced Today

WASHINGTON --- Senator Chuck Grassley said federal regulators have “finally followed the evidence to its logical conclusions after years of unnecessary delays and timidity” in the Securities and Exchange Commission’s insider trading case against Pequot Capital Management, Inc.

“There was clearly a case to be made against Pequot, and the SEC has finally admitted it. Today’s announcement bears out what the SEC lawyer Gary Aguirre argued years ago. He lost his job because he spoke out against his supervisors putting up roadblocks to an aggressive investigation of Pequot.  Mr. Aguirre had the courage to stand up and fight for what was right, and the next thing the SEC ought to do is hold someone accountable for how he was treated,” Grassley said.

The details of how the SEC turned a blind eye to this case were spelled out in an August 2007 report of the Finance and Judiciary committees, issued by Grassley and Senator Arlen Specter.  The report detailed the Inspector General’s failure to investigate credible allegations by former SEC attorney Aguirre that his supervisors pulled punches in the investigation because of one witness’ political clout.

The former SEC Inspector General involved left his position on the same day this report was released.

At this point, Grassley said, “If the SEC can come to a settlement with Pequot, why continue to fight tooth and nail with the former SEC attorney who initiated the Pequot investigation?”