The lawyer who once ran the US Securities and Exchange Commission's investigation into possible insider trading at hedge fund Pequot Capital Management is to warn a US Senate committee that the regulator is failing to protect the financial markets from hedge fund abuses.

Gary Aguirre alleged in a letter to US Congress officials that he was fired by the SEC after trying to subpoena John Mack as part of his investigation into Pequot, according to The Times. Mack was chairman of Pequot for three weeks last year and is now chairman and chief executive of Morgan Stanley.