SEC to Pay $775K Wrongful Termination Settlement to Fired Attorney

The Securities and Exchange Commission is paying a settlement of $775,000 to settle a wrongful termination whistleblower action filed by a former SEC attorney. The agency fired attorney Gary Aguirre in September 2005. In 2006, Aguirre publicly alleged that the SEC had blocked his investigation of Pequot Capital Management, a prominent hedge fund, and Adam Samberg, Pequot’s co-founder. Aguirre’s SEC probe of Pequot began in 2004; the SEC closed the investigation in 2006 after it had fired Aguirre. Aguirre claimed that he was fired because of his investigation of Pequot.

The SEC reopened its investigation of Pequot in January 2009 when documents emerged during a divorce proceeding showing that Pequot paid $2.1 million to a key witness in the Pequot probe beginning in mid-2007. The Pequot hedge fund was liquidated last year; last month, Pequot and Samberg agreed to pay $28 million to settle SEC charges that the hedge fund traded Microsoft shares on confidential insider information provided by a former Microsoft employee later hired by Pequot.

The SEC’s settlement with Aguirre represents his salary for four years and ten months plus his attorneys’ fees, according to the Government Accountability Project, a group that works with whistleblowers. The settlement is the largest ever disclosed by the federal Merit Systems Protection Board, which oversees such cases.

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