Madoff victims' trustee seeks payouts from family of David Becker, SEC general counsel
Thursday, February 24, 2011
The trustee trying to recover money for victims of Bernard L. Madoff's infamous Ponzi scheme is trying to recoup more than $1.5 million of Madoff payouts from the family of David M. Becker, the general counsel of the Securities and Exchange Commission.
The lawsuit is part of trustee Irving H. Picard's campaign to "claw back" funds from investors who were net winners in the Ponzi scheme, meaning they took out more than they put in. The lawsuit does not accuse the Becker family of any wrongdoing. The trustee sued Becker and his two brothers as executors and beneficiaries of their mother's estate.
When their mother, Dorothy G. Becker, died in 2004, she held a Madoff account with a reported balance of more than $2 million, according to a court filing. The Becker brothers liquidated the account in 2005. Overall, more money was withdrawn than their mother had deposited with Madoff, the lawsuit said. The purpose of the lawsuit is "to recover the fictitious profit" so it "can be equitably distributed among all of the victims," Picard said in the filing.
Through an SEC spokesman, Becker declined to be interviewed.
"I was not involved with my parents' financial affairs, and don't remember knowing about any investment with Madoff until after my mother's death in 2004 and the subsequent liquidation of her account," Becker said in a statement.
Asked if the Beckers would give up the money the trustee is seeking, SEC spokesman John Nester said, "He and his brothers plan to consult with legal counsel and do the right thing."
Madoff is serving a 150-year prison term for fleecing thousands of investors over many years. He pretended that their money was growing at a strong and steady rate, but he was actually using money from some investors to make payouts to others.
Becker worked at the SEC from 1998 to 2002 as deputy general counsel and then general counsel. He rejoined the agency in February 2009 as general counsel and senior adviser to Chairman Mary L. Schapiro. The SEC recently announced that Becker will return to the private sector at the end of February.
During his first tour of duty at the SEC, Becker had nothing to do with the agency's work on Madoff and was unaware of suspicions about Madoff, Nester said.
The New York Daily News reported on the lawsuit Tuesday night.
When Picard filed the suit against the Beckers, he did not know that David Becker was the SEC's general counsel, said Stephen P. Harbeck, president of the Securities Investor Protection Corp., which is also involved in helping to cover investors' losses.