Morgan Stanley announced today that the SEC has now decided to take the testimony of Mr. John Mack in the Pequot investigation. The evidence pointed in this direction 13 months ago, evidence which Mr. Gary Aguirre shared with his supervisors at the time. When Aguirre suggested that a subpoena be issued for Mack’s testimony, his supervisor refused, stating that Mack had powerful political connections. Over the next two months, Aguirre informed every link in the chain of command of his supervisor’s decision. He had no success in obtaining their approval to take Mack’s testimony. Instead, the Director of Enforcement fired Aguirre.

GAP General Counsel Joanne Royce commented: “I sincerely hope the Banking Committee, with its oversight jurisdiction, does what it can so other ethical SEC staffers won’t have to pay the price that Mr. Aguirre paid.”

In another development, the SEC Inspector General informed Ms. Royce that it has reopened the investigation into Aguirre’s charges of favoritism and retaliation and is seeking to interview Aguirre.