US Senator Charles Grassley told Securities and Exchange Commission chairman Christopher Cox he's concerned that unnecessary rules are slowing a Congressional probe into whether political influence derailed an investigation into hedge fund Pequot Capital Management Inc.
``I have serious concerns about indications that the SEC plans to impose unnecessary delays on Congress' ability to get to the bottom of this important matter," Grassley, an Iowa Republican, wrote in an Aug. 21 letter to Cox that was released yesterday.
Grassley said he was told by SEC associate general counsel Richard Humes that documents couldn't be turned over to members of Congress without approval from the agency's five commissioners. Humes said the earliest this could happen was Aug. 29, at the commission's next scheduled meeting. Grassley asked Cox to waive the requirement.
Gary Aguirre, a lawyer fired by the SEC last year, told the Senate Judiciary Committee in June he was denied permission to question Morgan Stanley chairman John Mack. Aguirre was investigating Westport, Conn.-based Pequot for insider trading, and Mack was briefly chairman of the $7 billion fund. Senate investigators are looking into whether the SEC suspended its investigation of Pequot for political reasons.
``We are committed to cooperate with the Committee on Finance and its staff to satisfy them as to the integrity of our investigative process," SEC spokesman John Heine said.
Grassley, chairman of the Senate Finance Committee, and Senator Arlen Specter, a Pennsylvania Republican, and head of the Judiciary Committee, asked Cox for documents related to the Pequot investigation in a letter dated Aug. 2. In yesterday's letter, Grassley also chided SEC staff for refusing to disclose information about Pequot on the basis that they can't discuss ongoing investigations.
``These investigations were closed or inactive at the time Congress started its inquiry," Grassley said. ``Reopening these investigations after Congress begins to ask questions and then citing the fact that they are active as a pretext to deny or delay congressional requests is unacceptable."
SEC officials questioned Mack this month about the sale of Heller Financial Inc. and trading in the company's shares by Pequot, a person familiar with the matter said Aug. 2. Mack said he had no advance knowledge of General Electric Co.'s July 30, 2001, purchase of Heller, the person said.