SEC settles with former attorney in Pequot case

Aguirre headed the commission’s insider trading case against the hedge fund Pequot Capital Management until he was fired after trying to subpoena John Mack, who had influence over the fund. 

Aguirre claimed Mack in 2001 leaked to Pequot a deal between GE Capital and Heller Financial that allowed the hedge fund to earn approximately $18 million by using the information it received.

However, when subpoenaing Mack, Aguirre claims his superiors pushed back, saying Mack had influential political connections. 

Aguirre’s resistance to his supervisors is what ultimately led to his dismissal. Still, the circumstances surrounding the investigation garnered the attention of two Senate committee investigations.

One committee report concluded Aguirre’s “termination appears to be merely the culmination of the process of reprisal…” 

About one year after the Senate report, SEC Inspector General H. David Kotz recommended Aguirre’s supervisors be disciplined.

The Pequot case appeared to end in December 2006 when the SEC decided to close it and not file charges against the fund. But earlier this year, the commission reopened the case. The new allegations closely track what Aguirre first claimed.