Gary J. Aguirre is an American lawyer, former investigator with the United States Securities and Exchange Commission (SEC) and whistleblower.
After working in a law firm briefly, he became a public defender, then worked as a trial lawyer in California. Having reached his professional and financial goals, he took an extended break in 1995. In 2000, he decided to go into public service and went back to law school, focusing on international and securities law.
After earning his second law degree, he applied for a job with the SEC, where he became the lead investigator on an insider trading case involving Pequot Capital Management. Suspecting the leaked information came from John J. Mack, a Wall Street titan and major contributor to the 2004 campaign of President George W. Bush, Aguirre wanted to subpoena Mack, but supervisors told him Mack had too much "political clout" and would not be pursued. Aguirre complained to a superior about the preferential treatment being given to Mack and was fired without warning. A Senate investigation later found his termination to have been an illegal reprisal."The Firing of an SEC Attorney and the Investigation of Pequot Capital Management." Report by the United States Senate Committees on Finance and Judiciary. (August 3, 2007) Retrieved February 20, 2011
In May 2010, Pequot Capital settled its insider trading charges with the SEC for $28 million"Conn. couple gets $1 mln SEC award for Pequot" Reuters (July 23, 2010). Retrieved February 18, 2011 and a month later, the SEC settled the wrongful termination suit filed by Aguirre for $5,000.Courtney Comstock, "Former SEC Whistleblower Gary Aguirre Gets Vindication For His Pursuit Of John Mack" Business Insider (June 30, 2010). Retrieved February 18, 2011 Aguirre returned to private practice in San Diego in 2008, specializing in securities law. He has emerged as a major critic of the SEC, calling it an agency that was set up to protect the public from Wall Street, but now protects Wall Street from the public.Don Bauder, "Gary Aguirre Major Source in Taibbi Blockbuster" San Diego Reader blog post (February 17, 2011). Retrieved February 19, 2011Liz Moyer, "Watchdog Alleges Insider Trading At SEC" Forbes (May 15, 2009). Retrieved March 1, 2011 He represents Darcy Flynn, also an SEC whistleblower, who in summer 2011 was interviewed by staff from three congressional committees. He said that the SEC had destroyed thousands of records of preliminary investigations and that SEC investigators trying to pursue a case against Deutsche Bank were thwarted by Richard H. Walker, then SEC director of enforcement, who shortly thereafter, took a job at Deutsche Bank as general counsel.Matt Taibbi, "Is the SEC Covering Up Wall Street Crimes?" Rolling Stone (August 17, 2011). Retrieved August 19, 2011 He also represents Rodolfo Michelon, a whistleblower, a former comptroller at Sempra Global, who claims Sempra paid kickbacks to Mexican government officials and has filed a suit against the SEC alleging the SEC "outsourced" its investigation of Sempra to a law firm with ties to Sempra, in effect subverting the law.Matt Reynolds, "SEC Kowtows to Fortune 500 on Corruption 'Investigations,' Whistleblower Says" Courthouse News Service (April 27, 2012). Retrieved May 3, 2012
Enters private practice Aguirre is a lawyer in San Diego, California. He was admitted to the State Bar of California on December 23, 1966.Gary Aguirre v. Securities and Exchange Commission, Case 1:08-cv-01872-ESH, Second Amended Complaint. United States District Court for the District of Columbia. Filed April 1, 2009, pp. 2–4 He became an associate at Brobeck, Phleger & Harrison, then one of San Francisco's largest firms. In his spare time, worked on Robert F. Kennedy's presidential campaign.Claude Walbert, "Coming Home: Gary Aguirre's return to San Diego". San Diego Lawyer (September/October 2007) pp. 16–20. On May 28, 1968, Kennedy sent him a letter that spoke of the special role lawyers played in bringing about orderly change to the nation. Just eight days after sending the letter, Kennedy was assassinated.
After a year, Aguirre left Brobeck to become a public defender in Fresno County, where he found both the trial experience and public service he was seeking. Later moving back to private practice in San Diego, he made a name for himself by proving that Pacific Southwest Airlines (PSA) was liableTed Vollmer, "PSA Ruled Liable for Crash Damage Claims", Los Angeles Times San Diego County Edition (August 15, 1979) for a mid-air plane crash over San Diego in 1978, then the worst aviation disaster in U.S. airspace."Hull filmmaker's documentary on plane crash opens Wednesday" The Patriot Ledger (April 6, 2010) Retrieved February 21, 2011 In the 1980s, Aguirre pioneered construction-defect litigation, a branch of class-action lawRicardo Sandoval, "When the roof falls in" (PDF) California Lawyer (September 1992) Retrieved February 18, 2011 previously considered by San Diego lawyers to be too difficult for plaintiffs to win. In 1983, San Diego Magazine called him "a legal fireball" for his case proving PSA's liability and for his case against the Manville Corporation, which had national importance."83 San Diegans to Watch in '83". San Diego Magazine (January 1983) p. 105Raymond A. Joseph, "Rescon Walls Cause Trouble for Manville", The Wall Street Journal (December 28, 1982)."A Manville Lawsuit Allowed to Proceed" The New York Times (December 14, 1982). Retrieved March 3, 2011
Arguing on behalf of homeowners in construction-defect cases, by 1994, Aguirre and his partner had won 94 consecutive cases, recovering over $200 million for the plaintiffs. Aguirre has received three "Outstanding Trial Lawyer" awards from the San Diego Trial Lawyers Association.
Manville In the early 1970s, Manville Corporation, a Dow Jones companyJohns Manville company history Johns Manville. Received March 3, 2011 sold a stucco-like product for use on exterior walls. Within a short time, the product was found to be defective and deteriorate rapidly, causing significant damage to homes and buildings.Lynne Reaves, "A bond in time" ABA Journal (July 1984). Retrieved February 27, 2011 Manville pulled the product off the market in 1974, just four years after it was introduced.
In the course of preparing his case, Aguirre began monitoring Manville in October 1981, when the company undertook a reorganization that moved 75% of its assets to four of five new companies it created.Larry Keller, "Aguirre Against Ch. 11 for Manville", San Diego Daily Transcript (October 28, 1982). Front page. The board of directors and officers remained in the same positions, so nothing essential changed; except the assets were diverted. Aguirre became convinced Manville was trying to put its assets beyond the reach of unsecured creditorsMichael A. Hiltzik, "A Hunch Could Pay Off in Manville Case", Los Angeles Times (December 15, 1982). and when he went to trial, he accurately predicted the company would file between 45 and 60 days.
The three-month-long trial concluded with Aguirre winning a $6 million award against Manville, at that time, the largest amount in San Diego Superior Court history.Larry Keller, "Manville Ordered To Pay $6 Million For Faulty Stucco", San Diego Transcript (July 2, 1982). The amount was later increased to $7.5 million when delay damages were added.Larry Keller, "Plaintiffs Get $7.5 Million", San Diego Daily Transcript On July 2, 1982, the day after winning his lawsuit against Manville, Aguirre went back to court to ask that Manville be required to post a $9 million bond to guarantee his clients' judgment in case of a bankruptcy filing, arguing that Manville was on the verge of filing a Chapter 11 bankruptcy.At the beginning of the trial in March, Aguirre predicted Manville would declare bankruptcy in 45 to 60 days and asked the judge then to guarantee his clients' judgment. The request was denied because at the time, Manville seemed financially sound with $2.2 billion in assets; also, no Dow Jones company had ever declared bankruptcy. (See Raymond A. Joseph, "Rescon Walls Cause Trouble for Manville", The Wall Street Journal, December 28, 1982; and Michael A. Hiltzik, "A Hunch Could Pay Off in Manville Case", Los Angeles Times, December 15, 1982.) Agreeing with Aguirre's argument, the judge ordered Manville to post a bond."Was Aguirre Prophetic on Manville Filing?" San Diego Daily Transcript (October 28, 1982)
Eight weeks later, on August 26, 1982, Manville did file for Chapter 11 protection from multiple damage awards, shocking financial analysts. Unlike the more than 12,000 other plaintiffs, primarily asbestos cases, Aguirre's clients' judgment was insured by a $9 million bond. All lawsuits against Manville were immediately stayed, but a federal bankruptcy judge in New York separated Aguirre's case from the others, paving the way for Aguirre's clients to receive their payments.Larry Keller, "Costa Viva Can Press Manville", San Diego Daily Transcript (December 15, 1982). Front page. The thousands of other lawsuits remained frozen until May 1988.History Manville Personal Injury Settlement Trust. Retrieved March 3, 2011
SEC investigator, becomes whistleblower In July 2004, Aguirre entered public service as a senior counsel at the SEC Division of EnforcementGary J. Aguirre v. Securities and Exchange Commission, Civil Action No. 08-1872 (ESH). United States District Court for the District of Columbia (December 2, 2009) in Washington, D.C. A routine check of Wall Street trades flagged unusually heavy stock purchases by Pequot Capital Management, a hedge fund, in Heller Financial in July 2001, which was bought by GE Capital shortly thereafter, earning Pequot $18 million inside of a month.S.D. Liddick, "The Devil and Gary Aguirre" San Diego Magazine (August 2008). Retrieved February 18, 2011 Aguirre was made the lead investigator on the case.Senate report, pp. 11–14 "The Firing of an SEC Attorney and the Investigation of Pequot Capital Management." Joint report by the United States Senate Committee on Finance and the Senate Judiciary Committee (August 3, 2007). Retrieved February 20, 2011
Aguirre pushed to subpoena John Mack, a top Wall Street executive who was then under consideration by Morgan Stanley to become its CEOMatt Renner, "SEC Whistleblower Speaks on Madoff Fraud" Truthout (December 22, 2008). Retrieved February 18, 2011 and had been a major contributor to the 2004 presidential campaign of George W. Bush.Glen Justice, "Once at Arm's Length, Wall Street Is Bush's Biggest Donor" The New York Times (October 23, 2003). Retrieved March 4, 2011 Initially, Aguirre had the full support of other SEC staff and of his supervisors. This changed on June 23, 2005, when Aguirre received a phone call from Eric Dinallo, head of regulatory compliance at Morgan Stanley, who wanted to know if the SEC was "going to proceed against Mack" because of concerns revolving around Morgan Stanley's decision to hire Mack as CEO.Senate report, pp. 28–29 "The Firing of an SEC Attorney and the Investigation of Pequot Capital Management." Joint report by the United States Senate Committee on Finance and the Senate Judiciary Committee (August 3, 2007). Retrieved February 20, 2011 The same day, Aguirre's supervisor, Robert Hanson, told him it would be an uphill battle to pursue Mack because of Mack's "powerful political connections"."The Firing of an SEC Attorney and the Investigation of Pequot Capital Management." Report by the United States Senate Committees on Finance and Judiciary. (August 3, 2007), p. 59. Retrieved February 20, 2011
Investigation derailed