September 22, 2011
David Becker Webcast on Ethics at the SEC
David Kotz, the SEC Inspector General, has determined that David Becker, the SEC’s former general counsel, had a conflict of interest with respect to the Bernard Madoff matter. Kotz indicated he is referring the matter to the Justice Department for criminal investigation. A copy of the Inspector General’s report is available here and a New York Times story on the matter is here.
Becker’s mother had an account with Madoff. When she died in 2004, Becker and his brothers inherited the account. They liquidated the account for $2 million, of which $1.5 million was fictitious “profits” generated as part of the Madoff Ponzi scheme. The Inspector General’s report finds that “Becker participated personally and substantially in particular matters in which he had a personal financial interest by virtue of his inheritance of the proceeds of his mother's estate's Madoff account and that the matters on which he advised could have directly impacted his financial position.”
In October 2010, while Becker was still SEC general counsel, he spoke on ethics at the SEC. Becker was a participant in a program at the Case Western Reserve University School of Law on The Changing World of Securities Regulation. In response to an earlier presentation criticizing the “revolving door” at the SEC, Becker set aside his prepared remarks and instead defended the ethics of enforcement personnel at the SEC. The webcast is available here. (Becker’s talk is in the Panel 2 webcast, beginning at about 4:56.) He even speculates (at 11:50) about why Madoff got away with what he did.
September 22, 2011 | Permalink
As Robert Burns noted, many years ago, "o wad some Power the giftie gie us, to see oursels as ithers see us.!"
It is hard for a man who considers himself ethical to realize that others may differ, especially given the benefit of hindsight. In Becker's case, from what has been reported it appears this quite ordinary failing was enabled by people who should have done better, both for their sake and his. They failed the basic text of ethics review--"How will this look if things go bad?"
Posted by: Arthur Armstrong | Sep 25, 2011 11:00:50 AM