Report: Pequot Capital gets Wells notices
CHARLOTTE -- The Securities and Exchange Commission is continuing its investigation of possible insider trading involving hedge fund Pequot Capital Management and founder Arthur Samberg, according to a letter to investors obtained by The Wall Street Journal.
The SEC has been examining whether Pequot traded Microsoft shares on confidential information provided by a former employee of the computer company who was later hired by Pequot.
The SEC sent Wells notices to Samberg and the firm about six weeks ago indicating it is prepared to bring charges, according to the Journal report Wednesday. A Wells notice is a warning that the SEC could bring civil charges.
The investment firm has denied any wrongdoing, but the paper said Samberg's letter, sent to investors Monday, explains that the Wells notices and any resulting enforcement action are "without merit."
According to the letter obtained by the Journal, Pequot will "defend the matter vigorously."
Pequot spokesman Jonathan Gasthalter and SEC John Nester declined to comment on the matter.
In May, Pequot Capital said it was liquidating its core hedge fund amid the investigation. In Monday's letter to investors, Samberg wrote that the Wells notices shouldn't slow the firm's liquidation process.
