SEC to seek Justice review in Madoff case: report

WASHINGTON Sat Sep 17, 2011 3:27pm EDT

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WASHINGTON (Reuters) - The Securities and Exchange Commission's inspector general plans to ask the Justice Department to review whether an SEC lawyer violated conflict-of-interest laws while working on the Bernard Madoff fraud case, Bloomberg News reported on Friday.

SEC Inspector General David Kotz is investigating whether former SEC General Counsel David Becker should have recused himself from advising the SEC on Madoff matters because he had inherited money from his late mother, who had invested with Madoff.

The head of the SEC, Mary Schapiro, has said she wished Becker had removed himself from the agency's work on the Madoff fraud case.

Becker received an inheritance from his mother that included Madoff funds, but an SEC ethics counsel cleared him to work on Madoff legal matters, including a recommendation on how Madoff's victims should be compensated.

The SEC voted in 2009 on a recommended method to compensate Madoff's victims, with some commissioners and staff unaware that Becker had received money from Madoff funds.

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