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Posted at 9:13 PM ET, 03/ 7/2011

One SEC conflict of interest probe leads to the next

By David S. Hilzenrath

Members of Congress probing potential conflicts of interest in the SEC's posture toward Bernard Madoff's investors are now expressing concern about potential conflicts of interest in the SEC's response to their probe.

It's the latest twist in the saga of David Becker, the former SEC general counsel who helped frame the SEC's position on Madoff issues after his family benefited from the Ponzi scheme.

Lawmakers have asked Securities and Exchange Commission Chairman Mary L. Schapiro to turn over a host of records, but Monday they complained that the SEC office at the center of the controversy -- the Office of the General Counsel -- was apparently coordinating the response.

"As a result of Mr. Becker's former position within the OGC, we are concerned that the preparation of the Commission's response might be supervised and conducted by individuals who were themselves involved in the events and communications" that are the subject of the inquiry, Rep. Darrel Issa (R-Calif.), chairman of the Committee on Oversight and Government Reform, and Sen. Charles E. Grassley (R-Iowa), ranking member of the Senate Judiciary Committee, wrote in a Monday letter to Schapiro.

The lawmakers asked that the task be entrusted to the SEC's inspector general, who is also investigating the matter.

SEC spokesman John Nester declined to comment.

Members of Congress are still waiting for Schapiro's answers to a list of questions about the Becker affair. They will have a chance to ask them in person Thursday, when she is scheduled to testify on Capitol Hill.

Three congressional panels have scheduled hearings on the SEC for Thursday.

By David S. Hilzenrath  | March 7, 2011; 9:13 PM ET
 
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Comments

Here's someone worse than Madoff: http://texsquixtarblog.blogspot.com/2009/04/who-is-worse-bernie-madoff-or-rich.html

Posted by: texansay | March 8, 2011 12:32 AM | Report abuse

yer ^ agreed xx

Posted by: Anonymous | March 8, 2011 4:25 AM | Report abuse

Why didn't the trustee in the Madoff case handle all this? He knew or should have known that the SEC is hiding something and continuosly act inappropriately. In light of these new revelations he should be compelled to use his subpoena powers to obtain ALL books, records, communications, etc., of ALL SEC workers. He will then find the true complicity in the Madoff affair.

Posted by: Anonymous | March 8, 2011 8:15 AM | Report abuse

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