SEC's top lawyer raked in Madoff profits, trustee says

SEC's top lawyer raked in Madoff profits, trustee says
Claims David Becker and brothers inherited money from parents; $1.5M in question
MAR 18, 2011
By  Mark Bruno
David M. Becker, the departing chief lawyer at the U.S. Securities and Exchange Commission, said he had no detailed knowledge of how his parents came to earn $1.5 million from an investment in Bernard Madoff's Ponzi scheme. Becker and his brothers, who inherited the money upon his mother's death in 2004, were sued in bankruptcy court in New York by the trustee liquidating Madoff's firm, Irving H. Picard, who seeks to recover the funds as a fictitious gain. “It is true that my brothers and I were designated as co- executors of my mother's will, and it is also true that we were the residual beneficiaries of my mother's estate,” Becker, 63, said today in an e-mail. “I have no direct knowledge of any of the other facts -- how and when the Madoff account was opened, what was invested, and what was in the account when it was liquidated.” Becker, who had been the SEC's general counsel from 1999 to 2002, returned to that role in 2009. At the time, the agency was reeling from its failure to uncover the Madoff scandal before it unraveled in 2008. Asked whether he disclosed his family's investment with Madoff when he rejoined the SEC, he said, “I can't discuss internal discussions.” Becker is finishing his last week as general counsel and senior policy adviser at the agency. A Feb. 1 announcement of his pending departure from the SEC came eight days before the date on a pre-trial summons from Picard that was served to Becker and his brothers, William and Daniel. ‘Two-Year Deal' Becker said the summons came in the mail “sometime late last week” and that he had “no idea” when the case was filed. He said his departure from the SEC post is “not remotely” related to the Madoff lawsuit. It reflects the end of his “two- year deal” with SEC Chairman Mary Schapiro, he said. The complaint in bankruptcy court, dated Nov. 12, alleges that the Beckers “have received $1,544,494 of other people's money,” and seeks to return the funds to other defrauded Madoff investors. “I don't know how we'll respond to the complaint,” said Becker. “I'll get legal advice first.” When Becker's departure was announced, Schapiro said in a statement, “David's wise counsel has guided the commission through a gauntlet of complex legal and policy issues.” Other top SEC officials also praised his work at the agency during a recent Washington securities forum. Mark D. Cahn, a deputy general counsel, was promoted to replace Becker. Cahn said he is set to start work on Monday. Picard's lawsuit against the Beckers was reported earlier by the New York Daily News. --Bloomberg News--

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.