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Two senators on Wednesday called on the Securities and Exchange Commission to re-open its investigation into alleged insider trading in a case involving a large hedge fund and an investment banking executive.

Sens. Charles Grassley, R-Iowa, and Arlen Specter, R-Pa., released an interim report arguing that the SEC gave Morgan Stanley chief executive John Mack special treatment during a probe of insider trading at Westport, Conn.-based Pequot Capital Management Inc., which runs $7 billion in hedge funds.

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