The chairmen of two Senate committees have written to the head of the Securities and Exchange Commission saying they are troubled by the agency’s handling of accusations that political considerations impeded the investigation of a prominent hedge fund, Pequot Capital Management.

In a letter dated Aug. 2, the senators — Arlen Specter, chairman of the Judiciary Committee and a Republican from Pennsylvania, and Charles E. Grassley, a Republican from Iowa who leads the Finance Committee — said that the S.E.C. and its inspector general had given Senate investigators information on the Pequot case that was “inconsistent, incomplete and contradicted by documentary evidence.”

("Contradicted by documentary evidence. Is that Congress-speak for, "They lied"? - Bobo)

They also told the S.E.C. chairman, Christopher Cox, that agency officials “were seemingly unaware” of important documents and meetings involving its investigation of Pequot.

As a result, they wrote, “many questions regarding the handling of the PCM matter remain unanswered.” They asked Mr. Cox for all documents created by the S.E.C. in connection with its Pequot investigation. "

So the Senators are troubled. Wonder why an experienced former prosecutor like Specter is "troubled" by the SEC's role in the case so far?

Could it be because he smells a big fat rat?

The article continues to call into question the SEC's capability of doing any sort of internal investigation into the firing of Gary Aguirre that would have even the pretense of legitimacy.

Folks, I've said this before, and I'll say it again.

Congress needs to appoint an independent special prosecutor, who needs to thoroughly investigate the allegations made by Aguirre, and get to the bottom of it, quickly, and credibly.

If the ugly story is true, the SEC needs to be disassembled, as it is so badly compromised it cannot do the job it's chartered with. If the top cop in the markets is so dirty that it is running interference for the bad guys, and selects the application of the rule of law based upon the amount of clout and cash its targets have, it isn't a cop anymore. It's a protection racket. A con. A sham, masquerading at protecting investors, when what it is really doing is obstructing justice on behalf of Wall Street's royalty.

That seems pretty clear to me. There is historical precedent for regulators being co-opted by the parties they are supposed to be regulating, so it isn't as though hat never happened before.

And the Pecora hearings demonstrate that a truly independent prosecutor can be uniquely effective an uncovering larcenous misdeeds by Wall Street's most venerated names - so the notion that rich, powerful institutions there couldn't possibly be up to no good is easily debunked. Those hearings revealed a cesspool wherein most of the biggest names on the street were so dirty as to make the most hardened inmates at Sing Sing blush. They resulted in the creation of the SEC via the 1934 Securities Exchange Act.

I think it's time to take off the gloves, and get a real independent investigator on the case. The stink from the SEC is getting more pronounced the more we learn about their handling of the Aguirre matter, and the assumption of good faith that we bestow upon that agency doesn't appear warranted.

We need to know what happened, and we need to know now. What we don't need is the same, allegedly corrupt agency, investigating itself. That is a farce. And we don't need the asleep at the wheel banking committee fighting to maintain territorial control, so it can declare that all is well after some backroom back slapping.

We deserve a cop that is doing its job. And right now, it appears that we have a cop who's holding the door of the getaway car for the robbers, after filling it up with gas and checking the tire pressure.

If that's the case, we need to end this now.

Appoint a special prosecutor, Senator Specter. It's time.