Washington Post – A Senate hearing to examine whether hedge funds deserve increased scrutiny instead descended into recrimination yesterday as officials at the Securities and Exchange Commission anda former agency lawyer traded allegations about the handling of a sensitive investigation.
Senate Judiciary Committee Chairman Arlen Specter (R-Pa.) called the hearing to build support for draft legislation that would require hedge funds, loosely monitored pools of capital favored by wealthy investors, to register with regulators and to disclose information about their operations. The funds play an increasing role in the economy, and they attract intense interest from pension funds and average investors.
But Specter’s bill, which he acknowledged would be stalled at least until January when the Democrats assume control of both chambers of Congress, quickly fell by the wayside in the wake of a flurry of personal attacks among current and former SEC lawyers. At one point, the remarks grew so heated that Specter said, “This hearing is filled with accusations and counteraccusations and denials, so if you have any denials to make, don’t wait for me to ask.”
The dispute centered on allegations made by Gary J. Aguirre, a former SEC enforcement lawyer who says he was fired last year for seeking to depose Wall Street titan John Mack in a probe into whether Mack and executives at the hedge fund Pequot Capital Management engaged in insider trading. That investigation ended earlier this year without any charges of wrongdoing.
