(Corrects 6th paragraph quote by removing the word "fraud")
* Issa subpoenas trustee Picard over ex-SEC lawyer Becker
* Becker had personal financial ties to Madoff fraud
* Issa investigating if Becker should have recused himself
(Adds detail on subpoena, background)
By Sarah N. Lynch
WASHINGTON, March 16 U.S. House Oversight
Chairman Darrell Issa said on Wednesday he has subpoenaed
records from Bernard Madoff Trustee Irving Picard in his quest
for more details about former Securities and Exchange
Commission top lawyer David Becker's personal ties to the
Issa's committee is probing whether the former SEC general
counsel should have recused himself from advising the agency on
Madoff matters because he had received an inheritance from his
mother that included Madoff funds.
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 the recommended method to
compensate Madoff's victims, with some commissioners and staff
unaware that Becker had received money from Madoff funds,
sources have told Reuters. [ID:nN09295660]
Picard is now suing Becker and his brothers to claw back
$1.5 million in phony profits from their mother's estate.
"Victims of the Madoff swindle rightly feel cheated by the
SEC's ineptitude," Issa said. "The decision to allow David
Becker to work on the Madoff case, despite family earnings from
a Madoff account, necessitates answers."
Issa's announcement about the subpoena comes nearly one
week after he held a hearing on the issue.
At that hearing, SEC Chairman Mary Schapiro told lawmakers
she now wishes in hindsight that Becker had recused himself.
She said she knew that Becker's mother had a Madoff account,
but could not recall whether Becker specifically told her that
he inherited money from that account.
Schapiro has asked the agency's inspector general to
investigate the matter.
Issa said on Wednesday he has asked Picard for all
documents pertaining to the Becker family account as well as
communications between Picard and the SEC concerning how
victims should be able to file claims.
Picard must comply with the subpoena by the end of business
on March 22.
(Reporting by Sarah N. Lynch; Editing by Gerald E. McCormick
and Tim Dobbyn)