Why is Pequot Hanging On To Their Stake in Interoil Corp?
In May of 2009, Pequot Capital Management announced that it was shuttering its doors and winding down the company.
The reason? Allegations of insider trading in Microsoft Corp. stock "cast a cloud over the firm" and became "a source of personal distraction", according to founder Arthur Samberg.

Arthur Samberg didn't wait to hear the SEC's findings - instead, he decided to close the fund for the reasons cited above.
Pequot Capital Management was not some small hedge fund firm - at one time they managed as much as $15 billion, which made them one of the largest hedge funds in the world. Around the time that Samberg decided to shutter the fund, Pequot had about $3.5 billion in total assets under management.
Anyways, Pequot started to liquidate and returns funds to investors.
In their Q1/2009 13F-HR, Pequot reported owning a total of 212 Section 13f securities.
By Q2/2009, this number was down to 158, and by Q3/2009, only 3 holdings (AMD notes, Fibertower Corp notes and Interoil Corp common shares) were included in the company's 13F-HR filing.

Sure, the position had been trimmed (391,767 shares to 212,821 shares) from the previous quarter, but surely Pequot could have just unloaded the entire position over the course of an entire quarter? It's not like IOC is an illiquid stock - Interoil Corp has a market cap of over $3 billion and an average daily volume of over 1.36 million shares.
The reason for Pequot hanging on to this particular holding remains a mystery - it will be interesting to see whether or not the company will have sold the remainder of the stake when the Q1/2010 13F-HR is released in mid-May.
Source: Pequot Capital Management Inc 13F-HR Filing For Q4/2009
Source: Davemanuel.com IOC Quote