Becker “participated personally and substantially in particular matters in which he had a personal financial interest,” and “the matters on which he advised could have directly impacted his financial position,” SEC Inspector General H. David Kotz wrote in a report made public Tuesday.
Kotz said he is referring the findings of his just-completed investigation to the public integrity section of the Justice Department’s criminal division.
Becker played a leading role, the report said, as the SEC considered different ways of determining how much money Madoff investors could keep or recoup.
By Kotz’s analysis, one position Becker championed could have reduced the legal claim against the Becker brothers by $138,500.
Another position Becker at one point supported might have precluded lawsuits like the one filed against him, the report said.
Such lawsuits, known as clawbacks, are used to reclaim fictitious profits from “net winners” — people who got more money out of Madoff’s Ponzi scheme than they had invested — so that the money can be redistributed among net losers.
The report also cited an instance of Becker acting against his apparent self-interest. In 2009, when Becker was asked to weigh in on proposed legislation that would have curtailed clawback suits, Becker stated that the proposal did not seem fair, the report said.
In testimony to the inspector general, Becker said it never occurred to him to try to use his SEC post to advance his personal fortunes.
“I sure did not use an instant of my time while I was at the SEC trying to improve my financial position,” he said, according to the report.
Congressional overseers are planning a hearing on the investigation Thursday.
“The Becker matter raises serious questions about the decision-making by senior management at the SEC,” Rep. Randy Neugebauer (R-Tex.), chairman of the House Financial Services subcommittee on oversight and investigations, said in a statement.
Kotz recommended that the SEC conduct a new vote on its policy toward Madoff victim compensation “in a process free from any possible bias or taint.”
SEC Chairman Mary Schapiro said the agency will follow that recommendation and others. She added that she believes the position the SEC took “was appropriate under the law and in the best interest of investors.”
Schapiro and several other SEC officials knew that Becker’s mother had a Madoff account, but the four other commissioners were not informed about his conflict of interest, the report said.
Loading...
Comments