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

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--