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09-17-2007, 11:57 AM
"An independent governmental review of the Securities and Exchange Commission's enforcement division is set to criticize the way it manages investigations and the pace at which settlement funds are distributed to investors, according to people familiar with the report.
The GAO report comes in the wake of complaints from Sens. Grassley and Specter about the SEC's handling of an insider-trading investigation involving Pequot Capital Management Inc. The controversy was sparked by former SEC enforcement attorney Gary Aguirre, who says he was fired after supervisors stopped him from issuing subpoenas to John Mack, now Morgan Stanley chief executive.
The GAO report isn't expected to be as pointedly critical as that issued by the Senate, people who have seen it say. One area of focus is the SEC's case-tracking system, which the report said had "significant limitations." Earlier this year the SEC changed its procedures by having senior enforcement officials in Washington review and assign cases. It also required staff to provide six-month status reports. Previously, cases were handled by whichever office first uncovered them.
The report includes recommendations that the SEC establish written procedures to approve investigations, expedite its closing of cases when warranted, and tackle a backlog of investigations.
The report compiled by the Government Accountability Office, and commissioned by Republican Sens. Charles Grassley of Iowa and Arlen Specter of Pennsylvania, is expected to be released as soon as today."
For more information:
http://online.wsj.com/article/SB118974046948527478.html?mod=googlenews_wsj
The GAO report comes in the wake of complaints from Sens. Grassley and Specter about the SEC's handling of an insider-trading investigation involving Pequot Capital Management Inc. The controversy was sparked by former SEC enforcement attorney Gary Aguirre, who says he was fired after supervisors stopped him from issuing subpoenas to John Mack, now Morgan Stanley chief executive.
The GAO report isn't expected to be as pointedly critical as that issued by the Senate, people who have seen it say. One area of focus is the SEC's case-tracking system, which the report said had "significant limitations." Earlier this year the SEC changed its procedures by having senior enforcement officials in Washington review and assign cases. It also required staff to provide six-month status reports. Previously, cases were handled by whichever office first uncovered them.
The report includes recommendations that the SEC establish written procedures to approve investigations, expedite its closing of cases when warranted, and tackle a backlog of investigations.
The report compiled by the Government Accountability Office, and commissioned by Republican Sens. Charles Grassley of Iowa and Arlen Specter of Pennsylvania, is expected to be released as soon as today."
For more information:
http://online.wsj.com/article/SB118974046948527478.html?mod=googlenews_wsj