Lawyer now lightning rod in feud between GOP and SEC
Republicans seek even more info about Becker's role in Madoff probe
By Mark Schoeff Jr.
Leaders of the House Financial Services Committee are continuing to press the Securities and Exchange Commission for details about a potential conflict of interest involving its general counsel, David Becker, in matters pertaining to Ponzi king Bernard Madoff, who invested money for Mr. Becker's late mother.
Mr. Becker now finds himself as a defendant in a “claw-back” lawsuit by the trustee in the liquidation of Bernard L. Madoff Investment Securities LLC. The SEC announced in early February that Mr. Becker would leave the commission by the end of February. The agency, has denied, however, that Mr. Becker's departure is related to the suit.
In a Feb. 24 letter to the SEC, Reps. Spencer Bachus, R-Ala., Jeb Hensarling, R-Texas, Randy Neugebauer, R-Texas, and Scott Garrett, R-N.J., sent seven questions to SEC Chairman Mary Schapiro about Mr. Becker's involvement with Madoff.
In a Feb. 25 response to the lawmakers, Mr. Becker wrote that he notified Ms. Schapiro and the SEC's ethics lawyer about his mother's estate when he returned to the SEC in 2009. He previously worked at the SEC from 1998-2002, a tenure that also included serving as general counsel.
Mr. Becker said that the SEC officials concluded that he had no conflicts of interest arising from his mother's account with Mr. Madoff, which was liquidated before Mr. Madoff confessed to the Ponzi scheme. They also said he did not have a conflict when he became a defendant in the suit brought by the Madoff trustee.
“The [SEC] Ethics Counsel found that I was not required to recuse myself from all Madoff-related matters simply because my deceased mother had at the time of her death in 2004 an account with BMIS, and I was one of the beneficiaries of her estate,” Mr. Becker wrote in his Feb. 25 letter.
The quick response, however, did not satisfy the House Republicans. Today, they sent Ms. Schapiro another letter consisting of six more queries about Mr. Becker.
The GOP appears to be using the Madoff case to buttress its opposition to providing the agency with additional funding to implement the Dodd-Frank financial reform law. The controversy surrounding Mr. Becker is adding fuel to that fire.
Among the requests in the letter dated today, the House Financial Services Republicans ask Ms. Schapiro to detail communication between her and Mr. Becker related to his mother's Madoff account; to turn over notes, e-mails and other documentation from her discussions with other SEC staff about Mr. Becker; and to provide written documentation regarding Mr. Becker's conversations with the ethics counsel.
Republicans have criticized the SEC for missing signals that could have exposed Mr. Madoff — primarily an analysis by Harry Markopolos in 2000. It's a point they will likely continue to pursue beyond Mr. Becker.
“Please provide us with the names of any individuals who have been employed by the SEC since 2000 who had a financial interest in a Madoff account,” the House Financial Services Republicans wrote in today's letter to Ms. Schapiro.
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