The SEC’s Pequot Capital Management case simply will not go away quietly.
The Washington Post reports today that new evidence has emerged in the Pequot insider-trading investigation that the SEC closed two years ago without filing charges. Since then the SEC has had to contend with charges of an inadequate investigation and two Inspector General investigations into its conduct. According to documents, Pequot Capital Management secretly began to pay $2.1 million to a key witness in the case last spring, just three months after several senators called on the SEC to reopen its investigation.
The Senate Finance and Judiciary committees has now asked Pequot’s chairman to provide records related to the payments, and the FBI is also reportedly looking into the matter.
Sen. Charles E. Grassley (R-Iowa) stated that “[t]he timing is suspicious and the explanation looks thin, so the payments should be investigated to determine if they were legitimate.” A spokesman for Pequot said that the payments were related to an employment issue and that the firm “will cooperate fully with the senators’ request.”