The top attorney at the Securities and Exchange Commission is being sued over allegations his family's estate wrongfully received over $1.5 million in phony profits from Bernard Madoff's massive fraud.
The lawsuit, filed late last year by Madoff trustee Irving Picard, targets the SEC's departing General Counsel David Becker along with his brothers William Becker and Daniel Becker. All three are co-executors of their mother Dorothy Becker's estate. Dorothy Becker passed away in June 2004.
According to the lawsuit filed in federal court in New York, the Becker estate received a little over $2 million since Dec. 11, 2002 from Bernard L. Madoff Investment Securities.
"The trustee's investigation has revealed that $1,544,494 of this amount was fictitious profit from the Ponzi scheme," the suit says. "Accordingly, defendants have received $1,544,494 of other people's money."
Madoff was arrested in December 2008 after admitting he ran a decades-long, multibillion-dollar swindle, considered the biggest investment fraud in history.
John Nester, a spokesman for the SEC, said on Wednesday that David Becker was unaware of his parents' investments with Madoff.
"He was not involved in his parents' financial affairs, and has no recollections of his parents' investment with Madoff prior to his mother's death and the subsequent liquidation of the account," he said in a statement.
Picard's suit seeks to recover that money from the Beckers to return it to wronged Madoff investors.
Becker is preparing to leave the SEC at the end of this month and return to private practice. He became general counsel in February 2009, where he has served as a policy adviser to Chairman Mary Schapiro on most of the agency's major policy and regulatory initiatives.
Previously he also served as the SEC's general counsel under past Chairmen Harvey Pitt and Arthur Levitt.
The case is Irving Picard, trustee for the liquidation of Bernard L. Madoff Investment Securities LLC v William P. Becker, Daniel I. Becker and David M. Becker, U.S. Bankruptcy Court for the Southern District of New York, No. 10-04620.
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