Former SEC Lawyer Denies Conflict in Madoff Case
A former Securities and Exchange Commission general counsel denied that he had a conflict in his handling of the Bernard Madoff case, according to written testimony obtained by CNBC.
Former General Counsel David Becker is scheduled to appear at a Congressional hearing Thursday to respond to allegations that he helped craft the SEC's position on compensation for Madoff victims, even though he had a financial interest in the outcome since his parents were Madoff investors.
But in his written testimony, Becker said, "I did precisely what I was supposed to do," including seeking advice from the SEC's ethics office and following it.
"I was advised that I had no conflict of interest in providing legal advice to the SEC" in the Madoff matter, Becker said.
Becker had inherited an interest in his parents' Madoff account after their death in 2004, and has acknowledged he became aware of the potential conflict in early 2009, after the Madoff scandal had become public.
Yet he continued to advise the SEC on how Madoff investors should be compensated.
In a report issued Tuesday, SEC Inspector General H. David Kotz said Becker helped persuade commissioners to change the agency's position on how to value clients' Madoff investments to a method that benefited some investors, like Becker. This could be a criminal conflict of interest, Kotz said, referring his investigation to the Justice Department.
In his testimony, Becker said, "I had no financial interest in the position that the commission took," adding, "it never occurred to me to look after my financial interest."
Becker will appear along with Kotz and SEC Chairwoman Mary Schapiro at a joint hearing Thursday before subcommittees of the House Financial Services and TARP committee and the House committee on oversight and government reform.