February 25, 2011

GOP Lawmakers Probe SEC on Top Attorney's Ties to Madoff

Republicans on House Financial Services Committee question Schapiro about Becker

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Republican lawmakers are giving the Securities and Exchange Commission (SEC) yet another drubbing regarding the Bernie Madoff Ponzi scheme. This time Republican lawmakers on the House Financial Services Committee want SEC Chairman Mary Schapiro to answer a bevy of questions regarding David Becker, the SEC’s general counsel who’s alleged to have earned more than $1.5 million from a Madoff account held in his mother’s estate.

Irving Picard, trustee for the liquidation of Madoff’s firm, has filed a suit against Becker and his two brothers as part of his efforts to regain “claw back” funds from investors who gained from the Ponzi scheme.

The Feb. 24 letter to Schapiro, which was sent by the four top members of the House Financial Services Committee--including the Chairman of the committee Rep. Spencer Bachus, R-Ala., and Rep. Randy Neugebauer, R-Texas, chairman of the subcommittee on Oversight & Investigations—asks Schapiro if during Becker’s first term at the agency, including his tenure as General Counsel from 2000-2002, if he was “aware of the analysis prepared by and presented multiple times to the SEC by Harry Markopolos, which correctly alleged that Bernard Madoff was operating a multi-billion dollar Ponzi scheme?” The Congressmen then asked: “If he was aware of the Markopolos allegations, did he inform then-Chairmen Arthur Levitt or Harvey Pitt?”

The Republican lawmakers also asked if Becker “notified the SEC’s Office of Ethics Counsel of his role as the co-executor of an estate that profited from the Bernard Madoff Ponzi scheme and seek its guidance?”

John Nester, an SEC spokesman, said that “Mr. Becker informed the SEC Ethics office shortly after his return to the agency in 2009 about the account that was liquidated in 2005. At that time, Mr. Becker also sought advice from the Ethics office, and was advised that the liquidated account was not a basis for disqualification from participation in certain Madoff-related matters.”

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