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The Securities and Exchange Commission today (June 29) agreed to pay $755,000 to San Diego attorney Gary Aguirre. The sum represents four years and ten months of his salary since the agency fired him in 2005, plus his attorney fees. The story of the SEC's blatant prostitution in the Aguirre case has been told on this blog and in my column several times before, but it is worth summarizing. In short, Aguirre's ordeal is a story showing how the SEC, which was born in the 1930s to protect investors from Wall Street predators, became an agency that protected Wall Street predators from investors. Aguirre had good reason to believe that John Mack, head of Morgan Stanley, may have passed information to Pequot, then one of the most powerful hedge funds. But Aguirre's supervisors told him that Mack had "juice" and "political clout." Mack was a big fundraiser for George W. Bush. Prior to his pursuit of Mack and Pequot, Aguirre had been given a two-step pay raise for "consistently going the extra mile, and then some." But after Aguirre wanted to interview Mack, Aguirre's supervisors gave him a negative re-evaluation outside the SEC's ordinary performance appraisal process.
Two Senate committees studied Aguirre's ordeal and exonerated him, blasting the SEC for protecting Wall Street titans and whacking the agency's own employee. Then the SEC inspector general reported the same thing, and recommended that Aguirre's supervisors be disciplined.
While pursuing two lawsuits against the agency, Aguirre kept working on Pequot. In early 2009, Aguirre presented hard evidence of Pequot getting illegal tips in directing certain trades. In late May of this year, the agency filed charges against Pequot, which had already announced plans to shut down.
However, the Mack matter is closed, and the SEC has not disciplined Aguirre's then-superiors, as the inspector general recommended. Legal Director Tom Devine of the Washington DC Government Accountability Project says that the settlement with Aguirre may be the largest of its kind. "Unfortunately, this large settlement is the exception that proves the rule. Until Congress provides real protections for financial regulatory employees such as Aguirre, existing law will remain the best excuse for government regulators to turn a blind eye."
In short, the SEC has not yet taken down that red light that hangs above its door. The agency remains controlled by Wall Street lawyers and their clients who offer fat jobs to SEC lawyers, and in return get easy treatment for securities crooks.
The Securities and Exchange Commission today (June 29) agreed to pay $755,000 to San Diego attorney Gary Aguirre. The sum represents four years and ten months of his salary since the agency fired him in 2005, plus his attorney fees. The story of the SEC's blatant prostitution in the Aguirre case has been told on this blog and in my column several times before, but it is worth summarizing. In short, Aguirre's ordeal is a story showing how the SEC, which was born in the 1930s to protect investors from Wall Street predators, became an agency that protected Wall Street predators from investors. Aguirre had good reason to believe that John Mack, head of Morgan Stanley, may have passed information to Pequot, then one of the most powerful hedge funds. But Aguirre's supervisors told him that Mack had "juice" and "political clout." Mack was a big fundraiser for George W. Bush. Prior to his pursuit of Mack and Pequot, Aguirre had been given a two-step pay raise for "consistently going the extra mile, and then some." But after Aguirre wanted to interview Mack, Aguirre's supervisors gave him a negative re-evaluation outside the SEC's ordinary performance appraisal process.
Two Senate committees studied Aguirre's ordeal and exonerated him, blasting the SEC for protecting Wall Street titans and whacking the agency's own employee. Then the SEC inspector general reported the same thing, and recommended that Aguirre's supervisors be disciplined.
While pursuing two lawsuits against the agency, Aguirre kept working on Pequot. In early 2009, Aguirre presented hard evidence of Pequot getting illegal tips in directing certain trades. In late May of this year, the agency filed charges against Pequot, which had already announced plans to shut down.
However, the Mack matter is closed, and the SEC has not disciplined Aguirre's then-superiors, as the inspector general recommended. Legal Director Tom Devine of the Washington DC Government Accountability Project says that the settlement with Aguirre may be the largest of its kind. "Unfortunately, this large settlement is the exception that proves the rule. Until Congress provides real protections for financial regulatory employees such as Aguirre, existing law will remain the best excuse for government regulators to turn a blind eye."
In short, the SEC has not yet taken down that red light that hangs above its door. The agency remains controlled by Wall Street lawyers and their clients who offer fat jobs to SEC lawyers, and in return get easy treatment for securities crooks.