The family of the top lawyer at the Securities and Exchange Commission invested with Bernie Madoff and earned more than $1.5 million in ill-gained profits, according to trustee Irving Picard, who has named the lawyer, David M. Becker, as a defendant in a clawback lawsuit, a Daily News investigation has found.
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, 63, who is leaving his post as general counsel and senior policy director of the SEC in five days to return to the private sector, has never publicly disclosed his family’s ties to Madoff. He and his two brothers, who are also defendants in the suit, were named executors of their mother’s estate, which included a Madoff account, after her death in 2004. They liquidated the account in 2005, withdrawing $2,042,845, and are being sued as co-executors of the estate and individually.
David Becker was the SEC’s general counsel from 2000-2002 and again from 2009 until this month. He joined the agency in 1998 as deputy general counsel.
A spokesman for the SEC, John Nester, confirmed Tuesday that Becker received the complaint several days ago.
“He had no involvement with his parents’ financial affairs, and no recollection of his parents’ account with Madoff prior to his mother’s death and subsequent liquidation of the account,” Nester said on behalf of Becker.
The lawsuit, filed on Nov. 12 of last year against Becker and William P. and Daniel I. Becker, is one of up to 200 that Picard has filed in an effort to recover money from people who gained from Madoff’s scheme and redistribute it among the far greater number of those who lost their savings.
A spokesperson for Picard’s law firm, Baker & Hostetler LLP, declined to comment on the Becker lawsuit, citing the ongoing litigation.
For Mets owners Fred Wilpon and Saul Katz, the stunning assertion that an SEC heavyweight profited from Madoff’s chicanery and is being sued by Picard could bolster their own claims that they were unaware of Madoff’s scheme, financial and legal experts said.
The crux of the 373-page complaint Picard recently filed against the Mets owners claims they “knew or should’ve known” about Madoff. No such claim is made in the straightforward, 24-page complaint against David Becker and his brothers.
Helen Davis Chaitman is a nationally renowned litigator who represents a number of Madoff victims and is a Madoff victim herself, and has been sharply critical of Picard’s methods in trying to recover funds.
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