Senator Tells SEC Chief of Pequot Probe Concern

Sen. Charles E. Grassley (R-Iowa) told Securities and Exchange Commission Chairman Christopher Cox that he was concerned that unnecessary rules were slowing a congressional probe of 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 wrote in a letter to Cox on Monday that was publicly released Tuesday.

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 would be Tuesday, when the commission is next scheduled to meet. Grassley asked Cox to waive the requirement.

Gary Aguirre, a lawyer fired by the SEC last year, told the Senate Judiciary Committee in June that he was denied permission to question Morgan Stanley Chairman John Mack. Aguirre was investigating possible insider trading at Pequot and Mack was briefly chairman of the $7-billion fund.

SEC spokesman John Heine said he had no immediate comment on the senator’s concern.