S.E.C. Refers Ex-Counsel’s Actions on Madoff to Justice Dept. (NYT)

[chill_wind]

S.E.C. Refers Ex-Counsel’s Actions on Madoff to Justice Dept.
By LOUISE STORY and GRETCHEN MORGENSON
Published: September 20, 2011


Actions taken by David M. Becker, the former general counsel of the Securities and Exchange Commission, in the Bernard L. Madoff matter are being referred to the Department of Justice for a possible criminal investigation to determine whether they ran afoul of federal conflict-of-interest laws.

Mr. Becker had financial ties through his family to an account with Mr. Madoff that he inherited with his brothers in 2004 and quickly closed. The Beckers have since been sued by the trustee overseeing the Madoff case, who is seeking to recover about $1.5 million in gains they received. Mr. Becker’s work at the S.E.C. in 2009 included advising on the compensation of Madoff victims, including how much they could recover.

The referral was part of an investigation into whether it was appropriate for Mr. Becker to work on Madoff-related matters at the commission given his financial tie. The 119-page report on Mr. Becker’s actions was undertaken by H. David Kotz, the inspector general of the S.E.C. Mr. Kotz wrote that he is referring the matter to federal prosecutors after consulting last month with the Office of Government Ethics and receiving its recommendation to do so.

The report is another black eye for an agency already under scrutiny for missing the Madoff scandal and more recently for routine destruction of some enforcement documents that may have been useful in later investigations.

http://www.nytimes.com/2011/09/21/business/sec-refers-ex-counsels-actions-on-madoff-to-justice-dept.html?pagewanted=1&_r=1

The article describes the report as talking quite a bit about Mary L. Schapiro, the chairwoman of the S.E.C.. She's expected to testify along with Kotz and Becker at a joint Congressional hearing Thursday of the House Financial Services Committee and the Committee on Oversight and Government Reform.

[dmosh42]

1. Yeah, I see your point, but I have the feeling that case....

will end up in the black hole Holder has created, where he makes a public statement that it will be investigated, and there's never a follow-up. (Oil market manipulation being the biggest item we never heard anything more.)