Securities Law

SEC General Counsel Is Named in Clawback Suit by Madoff Trustee

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The general counsel of the Securities and Exchange Commission is facing a clawback lawsuit that claims his late mother earned more than $1.5 million in fictitious profits from convicted Ponzi schemer Bernard Madoff.

David Becker was initially general counsel of the SEC from 2000 until 2002, the New York Daily News reports. He returned to the SEC as general counsel in 2009, less than two months after Madoff’s arrest in December 2008, according to a New York Post story on the clawback suit.

Becker and his brothers were executors of their mother’s estate, and they liquidated their late mother’s Madoff account in 2005, according to the suit, filed last November. They withdrew more than $2 million from the account, of which $1.5 million was fictitious profit, the complaint alleges. Becker was served with the suit earlier this month, the Post says.

According to the Daily News story, “The apparent conflict of interest raises significant questions about the watchdog commission’s failure to stop Madoff and his $65 billion Ponzi scheme, despite repeated red flags and investigations into his operations.”

Becker told the New York Post he had had no idea that Madoff had been running a Ponzi scheme. “This is about my parents’ investments. I had nothing to do with my parents’ investments,” Becker told the newspaper. He is leaving the SEC next week to return to the private sector, according to a press release.

Story corrected. at 8:15 a.m. to say Becker was served with the suit earlier this month.

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