{"id":5204,"date":"2011-09-23T00:00:00","date_gmt":"2011-09-23T05:00:00","guid":{"rendered":"https:\/\/institutionalinvestorsecuritiesblog.blawgcloud.com\/2011\/09\/sec_chairman_criticized_for_al"},"modified":"2022-04-04T15:23:00","modified_gmt":"2022-04-04T20:23:00","slug":"sec-chairman-criticized-for-al","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/sec-chairman-criticized-for-al\/","title":{"rendered":"SEC Chairman Criticized For Allowing Ex-Commission Official that Benefited from the Bernard Madoff Ponzi Scam to Help Craft Policy Regarding Victims\u2019 Compensation"},"content":{"rendered":"<p>Securities and Exchange Commission Chairman Mary Schapiro has been taking some heat because the agency allowed David Becker, a former SEC general counsel, to help develop policy regarding compensation for the victims of the Bernard Madoff Ponzi scam should be compensated even though Becker was someone who benefited from the scheme. SEC Inspector General H. David Kotz has asked the Justice Department to look into whether Becker violated any laws as a result and whether criminal charges should be filed.<\/p>\n<p>At a House hearing this week, Becker testified that SEC ethics officials told him that there was no conflict of interest preventing him from taking on this task. Attendees at the hearing criticized Schapiro for letting Becker participate in establishing compensation policy even though he had inherited his own Madoff account. Schapiro has already admitted that she was wrong in allowing him to stay involved.<\/p>\n<p>Some lawmakers believe that Becker\u2019s participation in this type of policy planning is just one more incident that has caused the public to lose faith in the SEC, which didn\u2019t even realize for almost 20 years that Madoff had been running a multibillion-dollar scam. They are now raising questions about leadership within the agency, the ability of SEC senior management to make decisions, and possible flaws in the Commissions procedures and policies as they apply to ethical matters.<\/p>\n<p>On Tuesday, Kotz issued a report stating that Becker took part \u201cpersonally and substantially\u201d in matters in which he had a financial interest. Also per his report, Kotz said that the ex-General Counsel had recommended to commissioners that they put into place a policy that would value Madoff clients\u2019 claims in a manner that would have restricted the court-appointed trustee\u2019s power to sue Ponzi scheme beneficiaries to get back fictitious profits. Becker is one of those beneficiaries.<\/p>\n<p>Earlier this year, the trustee, Irving Pickard, filed a lawsuit against Becker and his siblings contending that about $1.5 million of the money in their mom\u2019s account was a bogus profit that should go tot the fund designated to pay back victims of Madoff\u2019s Ponzi scam. Becker, who maintains that he never considered there to be a conflict of interest (he says that on two occasions, the ethics committee even advised him that this was correct) said that if he knew then that the trustee would sue him later he would have recused himself from working on the compensation policy.<\/p>\n<p>According to Reuters, while some lawmakers don\u2019t believe that Becker broke any laws, many are wondering why he didn\u2019t decide on his own to not get involved in Madoff-related SEC matters.<\/p>\n<p>Bernard L. Madoff Investment Securities LLC\u2019s multibillion-dollar Ponzi Scam, which cost investors billions, wasn\u2019t discovered until the end of 2008. Madoff has been sentenced to 150 years behind bars.<\/p>\n<p><a href=\"https:\/\/www.reuters.com\/article\/us-sec-becker-idUSTRE78K81920110923\">Some lawmakers doubt ex-SEC lawyer broke the law<\/a>, Reuters, September 22, 2011<\/p>\n<p><strong>More Blog Posts:<\/strong><\/p>\n<p><a href=\"https:\/\/www.investorlawyers.com\/blog\/2011\/03\/texas_congressmen_seek_answers\">Texas Congressmen Seek Answers from SEC Chairwoman Regarding Conflict of Interest Related to Madoff Debacle<\/a>, Stockbroker Fraud Blog, March 8, 2011<\/p>\n<p><a href=\"https:\/\/www.investorlawyers.com\/blog\/2008\/12\/madoff_investors_who_were_vict_1\">Madoff Investors Who Were Victims of \u201cPonzi\u201d Scam Contact Securities Fraud Law Firm Shepherd Smith Edwards &amp; Kantas LTD LLP to Explore Recovery Options<\/a>, Stockbroker Fraud Blog, December 17, 2008<\/p>\n<p> <a href=\"https:\/\/www.investorlawyers.com\/blog\/sec-chairman-criticized-for-al\/#more-5204\" class=\"more-link\">Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Securities and Exchange Commission Chairman Mary Schapiro has been taking some heat because the agency allowed David Becker, a former SEC general counsel, to help develop policy regarding compensation for the victims of the Bernard Madoff Ponzi scam should be compensated even though Becker was someone who benefited from the scheme. SEC Inspector General H. [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3740,3792],"tags":[],"class_list":["post-5204","post","type-post","status-publish","format-standard","hentry","category-miscellaneous","category-ponzi-scams"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>SEC Chairman Criticized For Allowing Ex-Commission Official that Benefited from the Bernard Madoff Ponzi Scam to Help Craft Policy Regarding Victims\u2019 Compensation &#8212; Investor Lawyers Blog &#8212; September 23, 2011<\/title>\n<meta name=\"description\" content=\"Securities and Exchange Commission Chairman Mary Schapiro has been taking some heat because the agency allowed David Becker, a former SEC general counsel, &#8212; September 23, 2011\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.investorlawyers.com\/blog\/sec-chairman-criticized-for-al\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"SEC Chairman Criticized For Allowing Ex-Commission Official that Benefited from the Bernard Madoff Ponzi Scam to Help Craft Policy Regarding Victims\u2019 Compensation &#8212; 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