Texas Congressman Jeb Hensarling is one of four Republican members of the House Financial Services Committee wanting to know more about Securities and Exchange Commission Chairwoman Mary Schapiro’s role in managing the conflict of interest presented by appointing David M. Becker as the SEC’s general counsel. Becker, who is no longer in this post, is with someone with a financial interest in a Bernard Madoff investment account. As a senior policy director for the SEC involved in dealing with Madoff Ponzi scam, he played a role determining how victims would be compensated.
Becker’s ties with Madoff didn’t come to light until trustee Irving H. Picard sued him and his two brothers to get back more than $1million of the $2 million they had inherited from their late mother’s Madoff investment. The former SEC general counsel claims that he told Schapiro and the chief ethics officer of his Madoff-related financial interest. Now, however, SEC inspector general H. David Kotz says he wants to probe possible conflicts of interest related to Becker’s role with the SEC as someone who stood to benefit from decisions involving Madoff Ponzi scam victims. According to the New York Times, two unnamed sources say while the SEC agreed to return to investors only the funds they had placed in their Madoff accounts, Becker had pushed for allowing the victims to keep some of their investment gains.
Lawmakers say they want details of Schapiro’s talks with Becker about his Madoff ties. They also want to know whether she followed all the steps delineated in government ethics rules. Also getting into the mix is Texas Representative and Republican Randy Neugebauer, who is quoted in the New York Times as stating that he believes the SEC should be held to the same high standard of “transparency and disclosure” as it holds other companies.
Shepherd Smith Edwards and Kantas founder and Texas securities fraud lawyer William Shepherd also wants to know, “Why was Ms. Schapiro not questioned about her own role as the former head regulator at the NASD – now known as the Financial Industry Regulatory Authority (FINRA)? She held that position for almost a decade just prior to her appointment as SEC Chairwoman. As Madoff defrauded thousands of investors, FINRA/NASD has the primary duty to regulate securities dealers, including the Madoff securities firm, which reportedly had a substantial role in activities related to Madoff’s advisory firm, as it perpetrated the massive Ponzi scheme.”
Related Web Resources:
S.E.C. Chairwoman Under Fire Over Ethics Issues, The New York Times, March 8, 2011
SEC’s Top Lawyer Becker Sued for Inheriting Madoff Ponzi Profits, Bloomberg, February 23, 2011
More Blog Posts:
Texas Securities Commissioner Not Convinced SEC Has Reformed Itself Since Madoff Ponzi Scam, Stockbroker Fraud Blog, December 5, 2009
SEC, NASD, FINRA & SIPC: New SEC Report Card on Madoff Catastrophy Further Reveals How Investor Protection Is Severely Flawed!, Stockbroker Fraud Blog, September 3, 2009
Madoff Investors Who Were Victims of “Ponzi” Scam Contact Securities Fraud Law Firm Shepherd Smith Edwards & Kantas LTD LLP to Explore Recovery Options, Stockbroker Fraud Blog, December 17, 2008