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Republicans question top SEC attorney on Madoff ties
February 25, 2011 / 3:13 PM / in 7 years

Republicans question top SEC attorney on Madoff ties

WASHINGTON (Reuters) - Several key House Republicans are raising questions of ethics about the top attorney at the Securities and Exchange Commission amid allegations that his family’s estate received $1.5 million in phony profits from Bernard Madoff’s Ponzi scheme.

In a letter to SEC Chairman Mary Schapiro, they ask questions about what SEC General Counsel David Becker knew about his parents’ investments with Madoff and whether he recused himself from advising and representing the commission on Madoff matters.

The letter, which was dated February 24 and disclosed publicly on Friday, comes in response to a lawsuit filed against Becker and his brothers by Madoff trustee Irving Picard. The December lawsuit says that Becker’s mother’s estate received a little over $2 million from Madoff investments, $1.5 million of which constitutes phony profits. Becker and his brothers are the co-executors of their mother’s estate. His mother passed away in 2004.

Madoff was arrested in December 2008 after admitting he ran a decades-long, multibillion-dollar swindle, considered the biggest investment fraud in history.

The suit does not allege that Becker or his brothers knew of the fraud. But it seeks to recover the $1.5 million so it can be returned to other harmed investors.

The SEC has said Becker was not involved in his family’s finances and that he did not recall any investments made with Bernard L. Madoff Investment Securities LLC.

Becker is slated to leave his job with the SEC at the end of this month. He most recently served as general counsel since early 2009, but previously he also worked as general counsel under past SEC Chairmen Arthur Levitt and Harvey Pitt.

In the letter, the Republicans ask about whether Becker was aware in 2002 of the tips the SEC had received about Madoff from Harry Markopolos.

They also ask about his past interactions with Madoff, if any, and whether he provided counsel to the SEC on Madoff matters.

Upon Becker’s return to the agency in 2009, they also ask if he informed anyone there about his parents’ investments and recused himself on Madoff matters.

The letter was signed by top Republicans on the House Financial Services Committee, which oversees the SEC. The signatories include House Financial Services Chairman Spencer Bachus and Vice Chairman Jeb Hensarling as well as House Financial Services oversight subcommittee chairman Randy Neugebauer and House Financial Services capital markets subcommittee chairman Scott Garrett.

Reporting by Sarah N. Lynch, editing by Dave Zimmerman

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