The inspector general at the Securities and Exchange Commission has recommended that the Justice Department examine whether to prosecute former SEC general counsel David M. Becker for helping shape the agency’s policy toward victims of Bernard L. Madoff’s investment fraud while having a personal stake in the matter.

Becker was an heir to and executor of his mother’s estate, which included a $2 million account with Madoff. In December, a trustee trying to recover money for Madoff’s investors sued Becker and his two brothers to recover about $1.5 million of fictitious profits paid out when their mother’s account was liquidated.

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.

Testifying in the inspector general’s investigation, Commissioner Luis Aguilar described the situation as “incredibly surprising and in­cred­ibly disappointing,” the report said.

In a statement, a lawyer for Becker, William R. Baker III, said the inspector general’s report contains “critical factual and legal errors that lead to erroneous conclusions.”

Madoff is in prison for running a multibillion-dollar Ponzi scheme. Though his clients believed their accounts with Madoff were growing in value, he was making payouts to some with money invested by others.

When he confessed in late 2008, one of the questions facing regulators was how to distribute any money recovered for his victims. Should clients be entitled to the full amounts shown on their bogus account statements? Or should the authorities ignore the fictitious profits and limit investors’ claims in the Madoff bankruptcy to the difference between what they deposited with Madoff and what they withdrew — the so-called money in/money out method?

The answer to that question could affect how much compensation they might receive from the Securities Investor Protection Corp. (SIPC), which is overseen by the SEC and backstops customers in failed brokerage firms.

According to the inspector general’s report, in early 2009, SEC officials reached a consensus in support of the money in/money out approach.

But, after Becker arrived at the agency, he for a time tried to craft a position that would recognize the fictitious profits, the report said. He ultimately dropped that approach but successfully championed a plan saying that investors should be entitled to an inflation adjustment on money entrusted to Madoff.

Becker consulted an SEC ethics official, who gave him a green light to participate in the SEC’s policymaking. The ethics counsel, William Lenox, was one of Becker’s own subordinates, the report said. Lenox told the inspector general that he took into account the fact that Becker “was a reputed securities lawyer who was making a decision to come back and serve the public,” the report said.

Both Becker and the ethics counsel took a more conservative approach to conflicts of interest in other matters, the report said.

Although at least seven SEC officials learned that Becker’s mother had an account with Madoff before the matter became public this year, none of them recognized a conflict or suggested that Becker recuse himself from related SEC work, the report said.

Instead of sending Becker to explain the SEC’s position on victims’ compensation at a 2009 congressional hearing, at which Becker would have disclosed his inheritance, the agency sent someone else, the report said. An SEC official in charge of legislative affairs told Becker that “it would be better if somebody else testified” because “when you’re in a political environment, people might want to make something of that,” Becker told the inspector general.

According to Becker’s testimony, Schapiro agreed that it would be better if someone else testified, the report said.

The report is a sharp reversal for Becker, long one of Schapiro’s top advisers and a prominent member of the securities bar. In February, he returned to private practice.

The inspector general’s report adds to the SEC’s already considerable embarrassment over the Madoff scheme. In an earlier report, the inspector general excoriated the agency for failing to stop the fraud in the first place.