Johnny Mack has a Senior Moment

Morgan Stanley Chief Executive Officer John Mack told the U.S. Securities and Exchange Commission that he had no advance knowledge of an acquisition in 2001 that's now under scrutiny for possible insider trading, a person familiar with his testimony said.

Mack was questioned yesterday about the sale of Heller Financial Inc. and trading in shares of the company by Pequot Capital Management Inc. before the deal was announced July 30, 2001, said the person, who declined to be identified because the probe hasn't been completed. At the time, Mack had just become CEO of Credit Suisse First Boston, which advised Heller.

The SEC decided to interview Mack after Gary Aguirre, a lawyer whom the agency fired last year, told the Senate Judiciary Committee he was denied permission to question the Wall Street chief. So far, the SEC hasn't found evidence to support the theory that Mack may have tipped Pequot, a Westport, Connecticut- based hedge fund, and the agency may notify him that the investigation is closed if nothing further comes to light in the next few weeks, the person said.

``This is Caesar's wife,'' said John Coffee, a securities law professor at Columbia University in New York. ``The SEC has to be above suspicion, so when someone makes allegations that an executive has been treated favorably, the agency is going to cut very square corners and make sure they get the person in and question him.''

SEC spokesman John Nester declined to comment. James Badenhausen, a spokesman for Mack, also declined to comment, which just leaves us chickens.

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