Back in 2006, Arthur Samberg's Pequot Capital Management was the subject of an insider-trading investigation after the SEC found out Pequot, then helmed by Morgan Stanley CEO John Mack, had profited from using inside information on a Microsoft trade. The investigation was lengthy and high-profile, and Congress got involved, but in the end, the entity couldn't find evidence of any wrongdoing. Of course, as we now know, the SEC missed a lot of things back then, and so this past January they reopened the investigation. But this time, Samberg is giving up without a fight. Yesterday he announced in a letter to investors that he had reached a “painful conclusion” to wind down the firm, which currently manages around $3.47 billion.
“Public disclosures about the continuing investigation have cast a cloud over the firm and have become a source of personal distraction. With the situation increasingly untenable for the firm and for me, I have concluded that Pequot can no longer stay in business.”
Samberg maintains he did nothing wrong. “I think this S.E.C. thing has just worn him down,” Brad Alford, head of the investment firm Alpha Capital Management and an early investor with Mr. Samberg, told the Times. Sure, of course. SEC exhaustion. It's a real thing.