One of the Caymans' most admired institutions, the hedge fund Pequot Capital, is dissolving in what its boss, Arthur Samberg, calls a "painful conclusion."

Especially because it may spare Samberg further pain. Like an angry chancre, an extremely painful SEC investigation into Samberg and Pequot from 2006 has still not concluded. Rather, it has popped up again.

Oh, there's so much to read about Samberg, the grandfather of hedge funds, and the long-running (in fits and starts) investigation into allegations of various dark inside-trading conspiracies involving him and pal John Mack, CEO of Morgan Stanley. Tales of a whistleblowing SEC investigator named Gary Aguirre and of senators and hearings and the GAO and probes of various natures. Neither Samberg nor Mack has been found to have done anything wrong, but the case has bubbled up again, and Samberg himself cites it as the reason for his dissolving Pequot.

So much to read, but start with this document: Senate testimony from December 5, 2007 by the SEC enforcement chief Linda Thomsen.

Click here for not only Thomsen's testimony but also rarely seen documents of an actual SEC probe. It gives a good glimpse into the workings (and non-workings) of the SEC.

You may recall that Thomsen was roasted by senators and dumped from her job in February in the aftermath of the Madoff scheme's unraveling and Harry Markopolos's complaints about the SEC's foot-dragging.

The SEC faced similar complaints from senators in the Pequot case back in 2006, so Thomsen turned over details of the SEC investigation that supposedly found no real crimes or violations by Pequot, Samberg, Mack, et al.