Updated from 8:27 a.m. EDT

Trades by hedge fund Pequot Capital were suspicious enough to trigger notification of the

Securities and Exchange Commission

on 18 occasions, and the agency is currently investigating the $7 billion money manager led by Art Samberg, the

New York Times

reported Friday.

The existence of the probe came to light when its former lead investigator told Congress he was removed from the case by superiors, according to the

Times

. The lawyer, Gary Aguirre, came off the Pequot case last summer after unsuccessfully seeking permission to question John Mack as part of the probe, the

Times

said.

According to a letter sent by Aguirre to several congressmen, the probe into Pequot centered on 18 trades that "came shortly before a public announcement sharply increased the value of its new holding." In all but two cases, the fund made at least $1 million on each trade, the letter alleged, although it did not specify the specific purchases.

Government officials identified one of the trades as a purchase of shares of Chicago-based commercial lender Heller Financial prior to its acquisition by

General Electric

(GE) - Get Report

in July 2001. The trade, paired with a GE short, netted $18 million for the hedge fund, officials told the newspaper.

Pequot denied any wrongdoing, saying the trades were "ordinary course" and were not born of any inside information.

"It is outrageous that the

New York Times

would print a front page story based on the unfounded allegations of a terminated SEC employee and unsupported by any evidence," the fund said in a statement. "Nobody at Pequot was tipped by anyone regarding the Heller acquisition or any other corporate event.

" In the period under review, Pequot conducted over 136,000 trades and it is natural that some limited number would be kicked out by SRO market surveillance efforts. At all times, Pequot's securities trading has been entirely proper and not based on insider information. The trades at issue were made in the ordinary course of the firm's business and were entirely normal within the context of its daily investing activities," the fund said.