|
 |
 |
|
Securities lawyers come to defense of former top SEC lawyer tied to Madoff
A group of top securities lawyers are coming to the defense of David Becker, the former top attorney at the Securities and Exchange Commission (SEC) who has come under intense fire from lawmakers for an apparent conflict of interest tied to his agency work with Ponzi schemer Bernie Madoff.
Fifty-two attorneys, who dealt with Becker both in his two stints as the SEC's general counsel and as colleagues in private practice, told lawmakers in a letter sent Thursday that he is "of the highest moral and ethical fiber." They add that accusations that Becker used his position at the SEC for personal gain in the Madoff matter "makes no economic sense whatsoever," given that he took a major pay cut to return to the SEC and leave his lucrative job as a partner at a private firm.
However, some on Capitol Hill are unimpressed and offended, both by the lawyers' defense and the fact they are mounting it in the first place.
“This effort only raises more questions about Becker having too cozy a relationship with those the SEC is supposed to regulate," said a GOP congressional source. "It’s appalling they’re dismissing concerns about a conflict of interest and defending money he received out of the Madoff scandal on the grounds that he could have made much more in the private sector.”
Becker, alongside SEC IG David Kotz and SEC Chairman Mary Schapiro, is slated to testify about his work at a joint congressional hearing Thursday.
A key critique of Becker is that he advocated for a compensation approach for Madoff victims that could have made clawback suits against investors who made gains on the fradulent investments — including Becker's parents — less likely.
The IG report called on the SEC to reconsider how to compensate Madoff victims. Schapiro agreed with the recommendation, but also praised Becker as a "talented, highly skilled lawyer and a dedicated civil servant."
Becker, who left the agency earlier this year, has defended his actions in the past, noting that he advised SEC officials about the connection and was told they did not constitute a major conflict of interest. But the IG report found that the SEC ethics office based its verdict on "incorrect assumptions" about the role the agency was playing in the Madoff matter.
In a draft version of the letter, the securities attorneys argue Becker is "being crucified" over the "relatively miniscule" size of his financial stake tied to Madoff, given the major pay cut he took to return to the SEC for a second stint as general counsel.
Based on publicly disclosed profit figures, the move back to the SEC in 2009 cost Becker more than $2 million a year. While the Becker brothers inherited $1.5 million in funds tied to Madoff, any financial advantage Becker could have gained by swaying the SEC's handling of Madoff victims would amount to roughly $138,500. That amount would then be divided between Becker and his two brothers.
"After giving up over $4 million, he is now being attacked over a perceived $34,600 possible advantage," the draft stated. Those details were later removed from the version sent to lawmakers.
The letter was spearheaded by Stephen Crimmins, a partner at K&L Gates LLC who previously spent a decade and a half at the SEC, including several at the same time as Becker. He also was chosen by Democrats to be a witness at the first congressional hearing devoted to the Becker matter back in March. Schapiro told lawmakers at that hearing that she wished Becker had recused himself from the Madoff work.
Most Viewed RSS Feed »
