M E M O R A N D U M
To: Reporters and Editors
Re: David Becker response
Da: Tuesday, March 22, 2011
Sen. Chuck Grassley of Iowa today made the following comment on the response of former Securities and Exchange Commission general counsel David Becker to his inquiry with House Government Reform Committee Chairman Darrell Issa requesting information on a seemingly obvious, significant conflict of interest in the Bernie Madoff fraud case.
“Mr. Becker’s response raises troubling questions about his work on Madoff matters and the SEC’s ethics procedures. It’s surprising that Mr. Becker still believes that disclosing his inheritance would have made him no ‘more or less effective in representing the SEC’ and that there was ‘no appearance of impropriety.’ Chairman Schapiro herself said she wished Mr. Becker had recused himself from Madoff matters, while Mr. Becker still refuses to acknowledge any responsibility for his actions.
“At the very least, the SEC showed an extreme insensitivity to the Madoff victims by allowing him to work on such a contentious case despite his conflict. Mr. Becker seemed to hold himself only to the minimal standard of what he believed was technically legal, rather than what was best for the Madoff victims and the integrity of the SEC. He said, ‘I do not remember considering whether I should recuse myself from the ‘net equity’ issue in the absence of a legal requirement that I do so.’ The SEC is supposed to look out for consumers. In this case, the agency didn’t look out for Madoff victims. It allowed an SEC employee who profited from a Madoff account to craft the commission’s position on how to treat Madoff victims. That’s unacceptable. I want to see ethics reforms at the SEC that go beyond adherence to the bare minimum of what might be technically legal.”
Becker’s response is available here. The prior press release follows for reference.
Contact: Jill Gerber (Grassley)
(202) 224-6522
Contact: Frederick Hill (Issa)
(202) 225-0037
For Immediate Release
Friday, March 4, 2011
Grassley, Issa Continue to Probe SEC Conflict of Interest in Madoff Scandal
WASHINGTON – Judiciary Committee Ranking Member Senator Chuck Grassley and House Oversight and Government Reform Committee Chairman Darrell Issa today sent a letter requesting information from the former general counsel of the Securities and Exchange Commission on seemingly obvious, significant conflicts of interest in the Bernie Madoff fraud case.
“Given the anger that victims justifiably felt for the SEC’s failure to catch Madoff sooner, it is difficult to understand how you and other SEC officials would not realize the strong appearance of impropriety created by your participation in Madoff matters after receiving proceeds from a Madoff account,” Grassley and Issa wrote to former general counsel David Becker.
Grassley and Issa’s letter follows their letter earlier in the week to SEC Chairman Mary Schapiro on the case.
Based on a staff review of SEC documents and an interview of Becker, it appears Schapiro allowed Becker to advise and represent the SEC in the Madoff case without fully, properly examining the conflicts of interest presented by Becker’s personal financial interest, among other concerns.
The text of the Grassley-Issa letter to Becker is available here.