SEC admits Madoff error

THE chairman of US market regulator the Securities and Exchange Commission admitted yesterday she should have done more to ensure her top attorney was not part of its work on the Bernard Madoff fraud.

In an affair that is undermining the SEC’s calls for more funding, Schapiro told a congressional panel that, in hindsight, its former general counsel David Becker’s Madoff ties should have been handled differently.

Becker was allowed to work on recovering money for Madoff’s victims despite his mother holding an account worth about $2m (£1.24m) with the convicted fraudster.

Madoff trustee Irving Picard is now suing Becker and his brothers to claw back $1.5m in profits made from the fraudulent investment.

“I wish that Mr. Becker had recused himself,” Schapiro said at the last of three hearings where she and other officials were grilled over the Madoff episode and the SEC’s budget.

The matter may be “one of the greatest challenges to the SEC’s credibility since Bernard Madoff managed to dupe so many Americans,” House Oversight Committee chairman Darrell Issa, a Republican, said.

Becker left the SEC last month but has said its ethics counsel cleared him to work on the Madoff case.