WASHINGTON (Reuters) - The Securities and Exchange Commission declined on Friday to detail how it handled complaints about SAC Capital Advisors, infuriating Sen. Charles Grassley who is looking into the agency's response to tips about possible wrongdoing.
Federal investigators have in recent years been cracking down on insider trading, which they say illegally gives some people unfair advantages that ordinary investors do not have.
Their broad-based insider trading probe first surfaced in October 2009, focused mainly on hedge funds, and has resulted in charges against close to 50 people.
Republican Grassley has been using SAC Capital as a case study of how the SEC handles insider trading investigations and referrals from other regulators who spot irregularities, according to his staff.
Grassley had written the SEC to ask what it did about referrals by the independent securities regulator Financial Industry Regulatory Authority, which had indicated there were suspicious trades by SAC Capital.
The SEC's enforcement director, Robert Khuzami, wrote Grassley in response that he was willing to describe how the agency's investigative process went generally but could go no further.
"We generally do not comment on the status of investigations or related referrals, and, in turn, are not providing information concerning the specific FINRA referrals you identified," wrote Khuzami, in his letter dated June 9.
Grassley was outraged.
"This isn't what I asked for, and it's not an acceptable response. I'm looking for the SEC to explain how it handled specific referrals. Did the agency review them and find no credible evidence of wrongdoing?" he said in an email statement.
"Or are they sitting in a drawer because the agency ignored them?" asked Grassley, who has long been a thorn in the side of the SEC.
Although he does not sit on the Senate Banking Committee, he has played an active role as an overseer of SEC operations and often asks the agency's inspector general to look into areas of concern.
Senators Grassley and Arlen Specter launched a probe into the SEC's handling of the Pequot insider trading case in 2006 after SEC whistleblower Gary Aguirre alleged he was wrongly dismissed for trying to pursue an investigation against the hedge fund.
(Additional reporting by Sarah N. Lynch, editing by Matthew Lewis)