Pequot Capital Suspected of Insider Trading: SEC
CNBC Anchor and Reporter
The SEC has issued a Wells notice to hedge fund Pequot Capital Management and its founder Arthur Samberg, CNBC has learned.
The notice, which focuses solely on the firm's trading of Microsoft stock in spring 2001, was issued about one month ago. It alleges the firm traded on material nonpublic information.
In a Wells notice, the SEC signals that it intends to take enforcement action on an alleged rule violation. People close to the investigation said the SEC might take action in the near future by filing a civil complaint.
Pequot, once one of the largest hedge funds in the world, has been in the process of winding down its operations. In May, Samberg, told investors that he would liquidate the firm's core funds and return cash to investors.
Samberg credited his decision to the fund's inability to overcome negative publicity drawn by a previous SEC investigation, although he was never charged.
A source told Reuters that Samberg had not received the Wells notice before his announcement.