Gary Aguirre’s Commentary on Rajaratnam Verdict and Wall Street Insider Trading

There are few Americans in our nation today who have displayed a greater degree of integrity and character than Gary Aguirre.

Gary who?

Gary Aguirre is a former SEC attorney who sued and settled with the SEC for wrongful termination. After departing the SEC he continued to pursue the case which brought Art Samberg of Pequot Capital to his knees.

I highlighted Gary Aguirre, that case, and much more last December in writing, Connecting the Dots: The US Attorney, The SEC, Art Samberg, Pequot Capital, Hush Money, Lying and More. Today we hear from Mr. Aguirre. 

What does he have to say about the verdict in the case against Raj Rajaratnam? He clearly believes the Rajaratnam verdict must be a beginning for America to learn what has truly transpired on Wall Street for far too long. Aguirre leads us to believe he has strong suspicion that insider trading by hedge funds was “the dynamic that drove the financial crisis.

Let’s navigate and be grateful for the wisdom and character of this great American. Mr. Aguirre writes,

I am pleased to see that a jury with its 14-count verdict has found the evidence in the Galleon case proves beyond a reasonable doubt how one of the world’s largest hedge funds routinely engaged in institutional insider trading.

This verdict, the $28 million Pequot-Samberg settlement last year, and the recent administrative trial of David Zilkha all tell how the nation’s biggest hedge funds have rigged the nation’s capital markets for at least a decade.

It has been six years since I testified before Congress how the nation’s biggest hedge funds routinely engaged in this practice with the help of the largest investment banks. I explained how institutionalized insider trading rigs the markets with this allegory:

The institutionalized form of insider trading by hedge funds insidiously erodes the integrity of the stock markets. The concept is best illustrated with an analogy. Imagine a sports arena with thousand small boxes organized in rows on the arena floor. Each box contains an egg: some are Faberge, others gold, others silver and on and on gradually to the rotten eggs. Egg buyers–some sophisticated; some not–carefully inspect the exterior of the boxes for clues to their contents. None may peak inside.

The inspection ends at 5 p.m. All egg buyers exit the arena, notes in hand, ready for tomorrow’s auction. In the early hours, a security guard allows a team of egg buyers to enter the arena, open the boxes and survey their contents. The public auction of the boxes begins at 10 a.m. sharp. With their survey notes, the early morning team pays richly for the boxes containing the Faberge, gold and silver eggs and craftily avoids those with lesser value. The sophisticated egg buyers are puzzled why their boxes never contain the prized eggs.

I have quoted below excerpts from my testimony regarding the scope of that practice and its impact on the capital markets.

My full testimony is on the Senate website. (For those who care about our nation and our markets, I strongly recommend your review of this testimony…LD)

It is now time for the Department and Justice and the Securities Exchange Commission to take a closer look at insider trading by hedge funds as a dynamic that drove the financial crisis.


Gary Aguirre
The Aguirre Law Firm

There is little doubt that Gary Aguirre knows of what he writes and speaks. He occupied the catbird’s seat within the SEC. He has both the perspective and the integrity our country so badly needs at this time.

Clearly he is writing to motivate our regulators and attorneys to leave no stone unturned in pursuing insider trading activities in every corner of Wall Street, especially in the darkest corners of the casino.

America deserves nothing less.

I thank Gary for his courage and leadership and welcome spreading his message embracing our virtues of truth, transparency, and integrity. I ask you to spread Gary’s passion by sharing this commentary.

About Larry Doyle 522 Articles

Larry Doyle embarked on his Wall Street career in 1983 as a mortgage-backed securities trader for The First Boston Corporation. He was involved in the growth and development of the secondary mortgage market from its near infancy.

After close to 7 years at First Boston, Larry joined Bear Stearns in early 1990 as a mortgage trader. In 1993, Larry was named a Senior Managing Director at the firm. He left Bear to join Union Bank of Switzerland in late 1996 as Head of Mortgage Trading.

In 1998, after 15 years of trading and precipitated by Swiss Bank’s takeover of UBS, Larry moved from trading to sales as a senior salesperson at Bank of America. His move into sales led him to the role as National Sales Manager for Securitized Products at JP Morgan Chase in 2000. He was integrally involved in developing the department, hiring 40 salespeople, and generating $300 million in sales revenue. He left JP Morgan in 2006.

Throughout his career, Larry eagerly engaged clients and colleagues. He has mentored dozens of junior colleagues, recruited at a number of colleges and universities, and interviewed hundreds. He has also had extensive public speaking experience. Additionally, Larry served as Chair of the Mortgage Trading Committee for the Public Securities Association (PSA) in the mid-90s.

Larry graduated Cum Laude, Phi Beta Kappa in 1983 from the College of the Holy Cross.

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