In The Spotlight: Hedge fund boss who found he couldn't escape the regulator

Art Samberg
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The Independent Online

When Art Samberg pushed himself to climb Kilimanjaro in 2000, to celebrate his 59th birthday, he was already at the summit of the hedge fund world. In fact, he is sometimes called the grandfather of the industry, having created Pequot Capital Management back in 1986.

But as remarkable as his ascent has been the manner of his descent, and the consummate Wall Street insider has now been dubbed a common insider trader.

Arthur J Samberg was born in the Bronx in New York, the son of an electrician, and soared through some of the best universities in the US – MIT, Stanford, Columbia – before making it big as a securities analyst and branching out on his own. He is on all the right philanthropic boards, counts chief executives among his friends, and – at least until the final years – made huge investment profits come economic rain or shine.

Whispers of impropriety dogged him, though, perhaps because he was so well-connected. Regulatory investigations came and went – and came again. Wall Street regulators feared pursuing him, at least according to one former SEC official, Gary Aguirre, who testified on Capitol Hill that he was fired after trying to ask questions of the wrong people when looking into insider dealing allegations concerning Pequot.

Throughout it all, Samberg denied wrongdoing, and his friends stuck ferociously by him. But in the end he was ground down by the scrutiny, and dramatically decided to shut his $3bn business a year ago.

He and Pequot do not admit or deny the SEC's charge that they used illegal insider information to make profitable trades in Microsoft stock. But they agreed to pay $28m to settle.