Network News

X My Profile
View More Activity

Posted at 4:13 PM ET, 02/24/2011

House Republicans question SEC on general counsel's conflict in Madoff probe

By David Hilzenrath

House Republicans want to know more about Securities and Exchange Commission general counsel David M. Becker's entanglement in Bernard Madoff's Ponzi scheme.

In a letter to SEC chairman Mary Schapiro on Thursday, four senior Republicans on the House Financial Services Committee, including Chairman Spencer Bachus (Ala.), asked whether the matter created any conflict of interest at the agency.

The trustee who is trying to recover funds for Madoff's investors has sued Becker as an heir to and executor of his mother's estate. When Becker's mother died in 2004, she held a Madoff account with a reported balance of more than $2 million, which the Becker brothers liquidated. The trustee alleges that the Beckers withdrew more than their mother had deposited in the Madoff account and that, like many other "net winners" in the Ponzi scheme, the Beckers were paid with other people's money. The trustee wants to take back more than $1.5 million of Madoff payouts.

In their letter, the House Republicans asked if Becker told anyone at the SEC about his Madoff connection when he rejoined the agency in 2009. They also asked if he formally recused himself from "from all aspects of the SEC's involvement with Bernard L. Madoff Investment Securities," and if he notified the SEC's ethics office about the matter.

"It gets to the heart of how does the SEC run itself now," Financial Services Committee spokesman Jeff Emerson said.

Also signing the letter were Reps. Jeb Hensarling (Tex.), Randy Neugebauer (Tex.) and Scott Garrett (N.J.).

In a statement, SEC spokesman John Nester said: "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."

When Harry Markopolos, the New York accountant who tried unsuccessfully to get the SEC to see through the Madoff scam, met with Schapiro after Madoff's arrest, Becker attended. According to Markopolos's book, Becker and Markopolos did not exactly hit it off.

When Markopolos said he was going to share additional investigative leads with the Department of Justice and other authorities but not with the SEC, Becker objected, Markopolos wrote in "No One Would Listen: A True Financial Thriller."

"Maybe he simply was insulted that I had called his agency incompetent ... but whatever the reason, he was furious," Markopolos wrote.

Becker told Markopolos that, as the general counsel, he could not hear information and be put in a position where he could not do anything about it, Markopolos wrote.

When the meeting ended, Markopolos wrote, he shook hands with Schapiro and another SEC official, "but not with David Becker."

By David Hilzenrath  | February 24, 2011; 4:13 PM ET
Categories:  Congress, SEC  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   StumbleUpon   Technorati   Google Buzz   Previous: Toyota recalls 2.1 million vehicles in U.S.
Next: Economic agenda: Friday, Feb. 25, 2011


Don't forget whose administration let Maddoff get away with his crimes.

You can't let the Contract On America deregulations and their author scott free with a hefty amount of blame.

Basically, like most other problems in this country, we can blame this on incompetent oversight from the right, incompetent right-wing mis-leadership at all levels and a right-wing conspiracy to destroy this country any way they can.

They are ALL corrupt.

Posted by: PoliticalPrisoner2012 | February 24, 2011 4:43 PM | Report abuse

Careful picking at the Madoff-scab, Republicans...I believe you'll find lots of Republicans festering just below the surface on that one.

Posted by: Anonymous | February 24, 2011 6:05 PM | Report abuse

OBama,Peloses sp,Reid chose not to go after the shrub and his cronies. Yet tha repubes have been in control 2months and they are going crazy with their march for ?? justice.Sounds like a bunch of pricks to me with their typical strategy of throw enough sht on the wall some thing is bound to stick this is so typical of a the crap we are force fed on a daily basis.

Posted by: Anonymous | February 24, 2011 8:26 PM | Report abuse

HAHAHAHAHAHA Can't you hear the only question they asked? "You boys didn't do anything wrong now, did you?" Well that settles that. Thank God almighty in heaven for our politicians who are also Gods. Go on, ask them if they're gods.

Posted by: marvinthemartain | February 24, 2011 10:37 PM | Report abuse

It was the GOP-ran SEC that ignored the phone calls and tips.

Posted by: Anonymous | February 25, 2011 2:27 PM | Report abuse

This might back fire. The Bush appointed Cox to head the SEC and Bernie was waiting for Cox to have him arrested it never happen. A report was given to Cox several times and several years still Cox did nothing. Why? Well the Banks and Corporations/Contractors were busy stealing taxpayers money with US Treasury Secretary Hank Paulson leading the way. The corruption was going on for 8 years and the SEC didn't have time for Madoff. Madoff was charged and convicted while the Banks were doing the same thing and never charged with their crimes. Some things are best left alone as the information and names of other criminals might come out. Let's hope Wikileaks doesn't bust this hearing wide open and name the Law Makers/Bush appointees who played a part in the crimes.

Posted by: qqbDEyZW | February 27, 2011 5:00 AM | Report abuse

Simply another attempt to chop our government at the expense of the American people.

Regulations were put in place to avoid another 1929 and a repeat of the Great Depression. Right-wingers have done everything they can since Reagen entered the White House and began chopping the regulations - good or made - in the name of ideology.

These people are hell-bent on destroying our government, therefore our society, regardless of the price to everyone but the privileged few.

The greatest danger this country has ever faced is the monumentally mislead 21st century right-wing mobs demanding the destruction of our nation.

Posted by: PoliticalPrisoner2012 | February 27, 2011 12:02 PM | Report abuse

Why bother with regulations when politicians have the ability to pressure regulators not to do their job? That one whistleblower had his life turned upside down and yet no one would allow him the chance to present his information. Either let these guys do their job or shut the farce down. As it is today the SEC is worthless.

Posted by: Desertdiva1 | February 27, 2011 4:38 PM | Report abuse

Post a Comment

We encourage users to analyze, comment on and even challenge's articles, blogs, reviews and multimedia features.

User reviews and comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions.

characters remaining

RSS Feed
Subscribe to The Post

© 2011 The Washington Post Company