Gary J. Aguirre is an American lawyer, former investigator with the United States Securities and Exchange Commission (SEC) and whistleblower.
After earning his second law degree, he applied for a job with the SEC, where he became the lead investigator on an insider trading case involving Pequot Capital Management.
[11] In the 1980s, Aguirre pioneered construction-defect litigation, a branch of class-action law[12] previously considered by San Diego lawyers to be too difficult for plaintiffs to win.
Within a short time, the product was found to be defective and deteriorate rapidly, causing significant damage to homes and buildings.
[18] Aguirre became convinced Manville was trying to put its assets beyond the reach of unsecured creditors[19] and when he went to trial, he accurately predicted the company would file between 45 and 60 days.
[14] The three-month-long trial concluded with Aguirre winning a $6 million award against Manville, at that time, the largest amount in San Diego Superior Court history.
[14][19][22] Eight weeks later, on August 26, 1982, Manville did file for Chapter 11 protection from multiple damage awards,[17] shocking financial analysts.
[24] In July 2004, Aguirre entered public service as a senior counsel at the SEC Division of Enforcement[25] in Washington, D.C. A routine check of Wall Street trades flagged unusually heavy stock purchases by Pequot Capital Management, a hedge fund, in Heller Financial in July 2001, which was bought by GE Capital shortly thereafter, earning Pequot $18 million inside of a month.
[32] White is a partner at Debevoise & Plimpton, the law firm hired by Morgan Stanley to vet Mack and was in charge of the process[30] She had previously been the U.S. Attorney for the Southern District of New York[33] which has jurisdiction over Wall Street.
On June 28, he had a "heated discussion" with Mark Kreitman, one of his supervisors and his former professor at Georgetown, over the SEC's refusal to interview Mack.
"[27] Apparently setting a precedent, Aguirre's supervisors re-evaluated his job performance, reversing the positive appraisal given just one month prior.
[34] Aguirre wrote an 18-page letter to members of the U.S. Senate who were chairmen of various related committees and subcommittees, detailing his allegations about Pequot.
Senators Charles E. Grassley and Richard C. Shelby, both Republicans, asked SEC officials for a confidential briefing on the matter.
[41] He said, "There is growing evidence that today's unregulated hedge funds have advanced and refined the practice of manipulating and cheating other market participants.
"[43][44] He warned that fixing the SEC so it would protect investors and capital markets would not be easy because powerful Wall Street investment banks liked things as they are[41][44] He said the SEC and the Justice Department had failed to adequately prosecute abuses by hedge funds,[41][44] and he compared the situation to that which preceded the stock market crash of 1929.
The filing of the case in 2005 or 2006, before the financial crisis, would have been the right message at the right moment for Wall Street elite: the SEC goes after big fish too.
In 2007, Senators Chuck Grassley and Arlen Specter urged the SEC to reopen the case against Pequot, but it remained closed.
The filing of the case in 2005 or 2006, before the financial crisis, would have been the right message at the right moment for Wall Street elite: the SEC goes after big fish too.
"[49] Aguirre now specializes in securities law, defending those victimized by investor fraud and those wishing to come forward to expose abuses.
In April 2008, he obtained a court order forcing the SEC to give him key records of its then closed Pequot investigation and later that year, he uncovered the evidence necessary to prove an insider trading charge against Pequot, founder Arthur Samberg and his former employee, David Zilkha[35] On January 2, 2009, Aguirre sent a 16-page letter with the evidence to Christopher Cox, then SEC chairman.
[35] Aguirre is helping Senator Grassley's staff examine 21,000 Federal Reserve (the Fed) transactions involving taxpayer funds distributed to banks and other financial institutions.
[6] Early in Flynn's 13-year career at the SEC, he worked on a case where investigators thought they had clear evidence of fraud against Deutsche Bank.
In September 2008, during the debate on the Troubled Asset Relief Program (TARP), Aguirre's projections on the costs of the taxpayer bailout were cited on the floor of the U.S. House of Representatives.
[68] Aguirre is frequently quoted and interviewed in the media regarding issues related to financial and securities law and whistleblowers.
[69] Aguirre says the SEC has completely lost sight of its mission[28] and that the mentality and culture won't change until the agency is no longer "run by attorneys who are on sabbatical" from Wall Street.
[39] After failing to investigate the Bernie Madoff ponzi scheme, Linda Chatman Thomsen left her position as SEC Enforcement Director to become a partner at Davis Polk & Wardwell, where according to the Wall Street Journal, she would be part of its "white-collar defense group".
[58] Robert Khuzami, who succeeded her, worked as a prosecutor in the U.S. Attorney's office in Manhattan's Southern District of New York, then went to Deutsche Bank for several years before returning being named SEC Enforcement Director.
[9][84] While living in Spain in 2000, he became transfixed by the Bush v. Gore case[26] and began thinking about the letter he had received from Robert F. Kennedy, which he had kept because it inspired him.
[86] After graduation, he wanted to enter public service[26][68] and an advisor suggested he apply for a fraud investigator's job that had come available at the SEC.
[26] Aguirre's son is the musician, Gary Jules;[87] his younger brother, Michael, was the San Diego city attorney[26] from 2004 to 2008.